Following a second day of records on Wall Street, European stocks rose on Tuesday as trading resumes after the Easter holiday. Investors are cheering strong data out of the US, China, and the Eurozone, showing the global economy was well on the recovery track. Yesterday’s data showed a gauge of U.S. services activity hit a record high while Eurozone April’s Sentix investor confidence arrived at 13.1 versus 6.7 expected, jumping to its highest since August 2018.
In China, private Caixin services PMI hit 54.3 in March, up from 51.5 in February, ending a consecutive three-month decline. Investors also cheered the reports that the EU may hit vaccination target by the end of June, much earlier than projected. On the negative side, China's central bank had called on lenders to ease back on loan growth for the rest of this year, citing worries about a possible bubble developing as well as rising debt.
Against this backdrop, the FTSE 100 in London gains 1.14% to 6,814, Italy’s FTSE MIB surges 0.51% to 24,837, France’s CAC 40 is up by 0.56% to 6,137, while the German DAX 30 edges 0.87% higher to 15,238. US stock index futures are edging down after climbing to fresh record highs on Monday.
In currencies, the dollar is back on the offensive following a short-lived bearish correction witnessed yesterday along with retreating US Treasury yields. EURUSD extended gains to the 1.1820 area earlier today before turning flat in recent trading. Despite the recent bounce, the common currency is yet to confirm a recovery above 1.1800 on a daily closing basis, with the euro remaining fragile and vulnerable to fresh losses due to the pandemic in Europe and outperformance of the economic recovery in the US.
Meanwhile, oil prices keep erasing yesterday’s losses that brought Brent crude to 1.5-week lows around $61.25. Today, the futures are back above the $63 figure but still lack upside momentum to make a decisive break above the $63.50 intermediate resistance amid the resurgent dollar demand coupled with the persisting concerns over recovery in global energy demand amid rising virus cases in several countries including India.
Nathan Lambert, Head of Global FX Analytical Department