Europe remains positive regardless of US negativity

Following strong ZEW economic sentiment figures, hopes are high that the eurozone will confirm its exit from recession tomorrow.

Although volumes have been low in the equity markets over the last couple of days, this morning’s healthy German ZEW economic sentiment report ensured that none of the major European exchanges slipped into the red today. Most of the European exchanges will have been mindful that tomorrow morning sees French, German and EU GDP figures released. They will be hoping to finally welcome the much-anticipated turning of the corner that European Central Bank chief Mario Draghi envisaged, even if it has come six months later than thought.

The FTSE 100 has taken its lead from the inflation figures for the UK released this morning. Both the consumer price index and the retail price index have fallen in line with expectations. Bank of England governor Mark Carney has again avoided having to write an open letter to the chancellor, as the CPI’s 2.8% is within the 1% limit of his 2% target. This does not represent any ground-breaking developments, but it does confirm the slow, steady improvements that have been made in UK economic data over the last couple of months. It would be a pity to spoil the happy mood that this has created, but with a deficit as large as the UK’s still to be tackled it is likely that the squeeze on consumer spending power could well get worse as the government struggles to reduce the balance.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.