Daily market commentary: European benchmarks follow the global upward trend at the start of a new month

European Shares

European benchmarks followed the global upward trend at the start of a new month, as share markets climbed almost everywhere from Tokyo to futures in New York. This strengthened market sentiment comes despite disappointing macro data from China over the weekend, with manufacturing PMI falling short below expectations while property sales also contracted, underlying challenges the second-largest economy in the world still must face. Today’s best performances are being brought by communication services and financial shares in Europe, leading benchmarks close to their short-term resistances. However, some investors remain sceptical that the current appetite for risky assets will continue further in the August. The recent move from the ECB, who introduced its new TPI tool aimed at keeping bond markets and borrowing costs between Eurozone countries under control, has significantly helped cash going back to the stock market.

Daily Market Commentary

However, investors may be tempted to take some profit out following the best monthly performance registered by equity markets since November 2020, while major bearish market drivers such as rising inflation, tightening liquidity and the prospect of a recession still linger.

Today’s focus is likely to be towards PMI data from both the EU and the US, while traders will also pay attention to corporate results with reports from DBV Technologies, Gaussin and Activision.

Pierre Veyret– Technical analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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