Stock markets started the recent week with several heavy selling strains as investor assurance revealed persistent and undeniable weakness and corporate profit outcome fell short to spark the much needed optimism. The bearish pressure subsided toward the last part of the week, however as the conference between government leadership organisation in both countries in France and Germany showed that the Eurozone is entrusted to maintain the monetary unification movement active in its present condition. Markets were immensely confident of this as it suggests that a departure from the debt-ridden countries namely Greece and Spain is less likely and with the addition of assured short term productivity conjecture.
The stock markets specifically in Europe rebounded from their yearly lows and most of the activities had been focused in financial stocks as traders grab the opportunity to buy into the flaw in some of the biggest banking stocks. Looking into the future, market volatility could possibly see some rise as investors focus is more likely to shift once more to key employment data from the United States with the monthly Non Farm Disbursement data scheduled for the next week.
Market activity possibly result in more volatility following Macro Data Releases
Market analysts are anticipating that employers in the US brought their hiring rates for the month of July at a staggered rate and that the unemployment rate is potentially going to stay above the historic high of 8 per cent. The consensus estimates of the NFP figures are revealing a predictable increase of 100,000 jobs for the said month. There are other significant information that is scheduled for the coming week with manufacturing productivity and consumer confidence levels are both forecasted to show a decrease for the month.
If the said speculations end up becoming true, it will be a clear drawback for stock markets in the US and will probably bring at least some of the more recent purchases in Europe equities to a halt. The primary concern will now be centred on whether or not any negative data in the US surveys will keep investors from pursuing ‘on sale’ prices in European markets as this has precisely been the case for the last two weeks. The good data however will likely lead to the latest rallies given that the market is not far from the lows of the year.
Technical Point of View
The up-to-date rally in the DAX is beginning to look very positive with the index breaking to new highs above resistance prior at 6780. This is mostly an encouraging sight which suggests that a full retracing is currently taking place. Although still caught in a near congruent triangle on the weekly charts this latest break however still shows no sign of any primary resistance until the psychological levels stand at 7000.