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Market Comment - April 25, 2012

Market Comment: UK, Europe, USA. (Wednesday, April 25, 2012).

Market Comment - April 25, 2012
UK and Europe
Today, not only in the UK but also in other countries struggling with growth all eyes will be on the UK’s first quarter GDP figures. While having already posted negative growth in Q4 2011, the UK might have been spared from entering a recession as fuel buying panic late March caused sales to skyrocket giving an additional boost to the economy.
Also drawing attention will be ECB’s Draghi appearing in front of the European Parliament’s monetary affairs committee and the latest updated economy forecast from the German economy ministry. However a potential upward revision to German growth forecast has already been widely leaked and should therefore been priced into share prices already. Still it needs to be seen if yesterday’s modest rebound has indeed further to go and stocks are able to stabilise or if it has merely been a result of markets taking a breather after the sharp drop on Monday.
Ultimately within the next few days it is expected that French election will once again take centre stage possible putting renew pressure on stocks. Here much of the focus will be if and on how much Mr. Hollande will move to the centre left to get the necessary votes needed to be able to claim victory. A move more to the centre left might also entail that the stability pact agreed by Eurozone members might not be in danger and that additional spending will be limited bringing ultimately at least some relief to stocks.

Market Comment - April 25, 2012
In the US Apple once again delivered bumper earnings, not only beating expectations by a wide margin but also showing very strong growth in China. With the US earnings saison slowly coming to an end, main focus today will be on the FOMC, starting off in the early evening with the announcement of the interest rate decision followed by release of projections for the economy and finally concluding with Fed Chief Bernanke’s press conference. While no change in interest rates is expected, the magic words will once again be ‘quantative easing’ and ‘potential tools available’ to the Fed and even more important the degree of willingness of the Fed to deploy these measures if required.

Markus Huber - Head of German HNW Trading - ETX Capital

Mercredi 25 Avril 2012