European markets are set to open mildly higher this morning as the earnings season kicked off yesterday. Alcoa smashed all the estimates on every scale and this has made the investors more confident that recovery in the economic data is leaving its impact on the corporate earnings.
Are we going to see another record high for the equity indices ,which we experienced less than one week ago due to this? May be not that early, because the economic engine, Germany, has started to lose its steam. The reality is that all that optimism and the gains for the stock markets, which we experienced on the back of the US jobs report was wiped out this week. This is mainly due to the increase in the anxieties about the global growth and the fear that the Fed will increase the rates much faster than anticipated.
Therefore, the main focus will be towards the Fed minutes and investors once again will try to gauge any clues about the increase in the interest rate. Given that we had number of speeches by few Fed members this week who maintained their dovish tone, it is more than likely that nothing new may be revealed in these minutes. Perhaps, the best gauge itself be the earnings season it self which will articulate the true picture of the economy and will bring issues like employment, growth in the spot light.