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XTB TRADEBEAT

European stocks sink, EUR and GBP ignore stellar PMIs

Summary:

  • European equities post heavy losses, a delay of vote on tax reform in the US Senate could deteriorate sentiment
  • Manufacturing PMIs from Europe and the UK came in a stellar shape, EUR and GBP ignore these releases though
  • CAD awaits an important package of data

European indices moved significantly lower at the start of the last month of 2017. The selloff was led by tech stocks once again and the generally downbeat moods could stem from the delay of vote on the tax reform in the US Senate. Moreover, we got stellar manufacturing PMIs from Europe and the UK, still, it did not translate into stronger EUR and GBP.

Rally on European stocks has significantly slowed down of late. Although they are still far from proper correction, bulls have run out of stem somewhat and benchmarks from the old continent look quite depressed compared to the US indices. Moreover, the sentiment at the start of the last trading session this week was soft as investors were disappointed that the US Senate delayed the vote on the tax bill. Moreover, the released PMIs from Europe were stellar but it has not translated into better moods on equity markets. It’s worth adding that tech stocks resumed declines. 

UK manufacturing PMI unexpectedly sped up in the past month beating even the most optimistic forecasts of analysts surveyed by Bloomberg. The release showed a pick-up from 56.6 (revised up from 56.3) seen in October to 58.2. Moreover, PMIs from European economies were good as well. However, GBP is down 0.16%, whilst EUR is traded flat vs the greenback. 

It’s been the unbelievable week on the major cryptocurrencies as we’ve experienced incredibly chaotic moves up and down which in turn have led to new highs on Bitcoin, Litecoin (LTCUSD), Ethereum (ETHUSD) or Dash (DSHUSD). While Bitcoin continues to climbing there are getting more watchers claiming that it could be the biggest bubble ever. According to Birinyi Associates which studied Bitcoin versus 10 large financial bubbles the most famous digital currency showed particular bubble-like qualities this week, surging beyond $11,000 before trading back at around $9,600 yesterday afternoon. Notice that the price began November nearby $6,500 meaning that Bitcoin almost doubled its value just in a month.

Friday calendar looks interesting, especially in case of American markets. GDP reading and report from Canadian labour market could decide on market expectations of BoC’s rate hikes, hence CAD could be a big mover today. Moreover, a vote on tax bill proposal was delayed on today’s afternoon. 

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