Daily market commentary: Stocks trade higher in Europe, alongside US Futures as new round of diplomatic talks begin


Gold prices are hedging down during early Monday trading, as the flight to safety – that saw the price of the precious metal rise above $2,000 during the previous week – shows signs of abating. The mood in the markets appears to have improved, with hopes that negotiations between Russia and Ukraine may open the way for a de-escalation on the terrain. Perhaps such views are far-fetched, considering the intensity of the ongoing conflict, however they reflect the fact that from a market perspective, risk aversion may be behind us, reducing the scope for gold to revisit last week’s maximums. This dynamic is also supported by expectations that the US Federal Reserve will, when it meets later this week, announce the first interest rate hike since 2018, causing treasury yields to rise and weighing down on the price of the precious metal.

Ricardo Evangelista – Senior Analyst, ActivTrades

European Shares

Stocks traded higher in Europe on Monday, alongside US Futures, as investors bet on an improving geopolitical context at the beginning of a new round of diplomatic talks. Market volatility may not be over as war continues for now, with Russia still targeting military facilities across Ukraine. In addition, the prospect of a military assistance from China, recently raised by US intel, may bring further shock to stock markets. However, market sentiment improved over the weekend as both Russia and Ukraine are set to resume discussions via video conference, in a bid to end the war following recent progress. On the macro front, investors brace for another busy week with an agenda mostly dominated by major data releases from the US, Europe and China (Industrial production, ZEW Economic sentiment, PPI, GDP, Retail sales, CPI etc…) as well as a batch of monetary policy decisions from major central banks such as the FED, RBA, BoE and BoJ plus a press conference from the ECB due later this week. Volatility will continue as market sentiment is likely to remain wavy this week while the “risk-on” tone seems to prevail so far.

Technically speaking, EU benchmarks are hovering close to major resistance levels, with the DAX-40 index flirting with the strong 14,000 pts level. A clearing of this zone would unlock an extended bullish potential towards 14,400 pts and 14,930/15,000 pts by extension.

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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