Another day and another record high on Wall Street where the NASDAQ hit the 4000 mark after 13 years yesterday, but these gains were short lived as traders started to put the kid on their profit.
On the other hand, the 2% fall in the Brent prices which we experienced yesterday morning on the back of the Iranian deal went pretty much in full reverse in late afternoon, as the dust settled and traders saw the real picture. The reversal took place because the deal does not alter the prospects of supply versus the demand for Brent. Therefore, it is safe to say, that the gains which took place in the airline sector yesterday, could be under pressure today, if the above agreement has its merits which is supply side remains unaffected by this Iranian deal.
As the economic docket for Europe is pretty much empty, we are expecting a subdued trading action during the European session. Having said that, few events which may cause a bit of the hostile situation in the markets could be the speech of the Central Bank’s speaker Asmussen and Mersch, who are scheduled to speak in Germany. The main focus of their speech could be pinning down the value of the euro to sustain a meaningful growth in the euro region.
Back in the UK, we have Mark Carney’s testimony on the inflation report which is due at 10:00 GMT. Without a doubt there could be a flurry of questions around the interest rate topic, and interrogation could take place that when the Bank of England will raise its interest rate, given that the unemployment rate could be falling below the threshold level of 7% before the government projected time line.
After a disappointing read of pending home sales data in the US yesterday, which was believed to be impacted due to the government shutdown, investors will have more economic data to digest today. The building permit and consumer confidence data will grab most of the attention during the trading session which is due at 13:30 and 15:00 GMT and the expectations are for 0.94M and 72.2 respectively.
The government shutdown curse could once again have an impact on consumer confidence which we all know that previously it slumped to 71.2 during the month of October. I will be not surprised if the final reading for the consumer confidence does not dishearten traders again, because we already have warnings from the retailers about their earnings, as we head towards the Thanksgiving holiday.