European markets are set to open slightly higher after having a fragile start yesterday. It is by no means any surprise, because when we have a strong rally like we had in the past couple of weeks, it is almost certain to see some sort of profit taking and a bit of hesitation among traders. Moreover, let’s not forget that this is the important week for the markets on both sides of Atlantic. In Europe, it is the ECB meeting which is keeping the investors guessing if the president of the ECB bank will be inspired by the courage of the bank of Japan’s move and announce a full blown QE. As for the US, on Friday, we have the US NFP data, which could dictate the interest rate decision. One important thing that I am focused on is that for the US indices we have seen the all times highs but as for the FTSE 100 or the DAX, they are far off their highs. So the question is that how long the US can drag the european indices higher before they run out of steam.
Another important event of the day is the single supervisory mechanism in Europe where they will take control of 120 biggest European banks. We will also get the EU economic forecast by the European Commission. The expectations are not that high because we do know that the euro region has faced the economic downturn with some countries posting negative growth. Having said that, this forecast will be slightly different as compared to the previous ones because they were more about the austerity measures, but this time, it could be about the fiscal expansion.
In terms of corporate news, BMW announced smashing results this morning with the sales of 10 billion euro, while the estimates were for 19.3 billion euro. The upbeat news was that the company has confirmed its 2014 forecast. It is the world’s number one luxury car maker and they have very strong position among their competitors. The questions that many investors have is that how the BMW is positioned in electric sales of cars, as this is the future of the car industry. BMW has a close relationship with Tesla motors and they are using tesla electric batteries in their cars and we are confident that this relationship could be very fruitful for the company in the coming years
Given the rough tide in Europe, we think that the company has done a good job and produced a strong number in selling their cars in Europe. The overall car sale race around the globe is also important factor for the company and they have sold nearly 1.3 million cars which is once again a robust number.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.