Stock benchmarks registered modest gains on Tuesday
Stock benchmarks registered modest gains on Tuesday, extending the sentiment seen in Asia overnight, with investors bracing for today’s crucial US inflation data.
As previously said in our last report, market sentiment towards risky assets has lost a bit of its direction over the past few days after Federal Reserve officials expressed mixed hints about the future of monetary policies. With traders and investors worldwide not knowing what to believe, they will likely turn their focus back to data, making today’s inflation print crucial.
Simply put, if the cooling of rising price pressure is confirmed with today’s data, the prospect of a less aggressive stance from the Fed could become a reality, likely boosting appetite for stocks.
On the other hand, CPI data showing inflation remains stubbornly high would negatively impact price action towards equities, opening the way for a deep correction on most benchmarks following the rally that started at the end of October.
The first scenario is currently being priced in as the STOXX-50 index challenges a major daily resistance at 4,240.0pts, driven higher by basic materials, healthcare and consumer cyclicals.
Pierre Veyret – Technical analyst
As previously said in our last report, market sentiment towards risky assets has lost a bit of its direction over the past few days after Federal Reserve officials expressed mixed hints about the future of monetary policies. With traders and investors worldwide not knowing what to believe, they will likely turn their focus back to data, making today’s inflation print crucial.
Simply put, if the cooling of rising price pressure is confirmed with today’s data, the prospect of a less aggressive stance from the Fed could become a reality, likely boosting appetite for stocks.
On the other hand, CPI data showing inflation remains stubbornly high would negatively impact price action towards equities, opening the way for a deep correction on most benchmarks following the rally that started at the end of October.
The first scenario is currently being priced in as the STOXX-50 index challenges a major daily resistance at 4,240.0pts, driven higher by basic materials, healthcare and consumer cyclicals.
Pierre Veyret – Technical analyst