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Current Futures: Dow +65.00, S&P +7.80, NASDAQ +12.75
European markets are heading higher, as positive news came from the Euro-area. The S&P futures also advanced, shedding some part of the declines seen during the prior day, on Monday trade.
The S&P futures added roughly 8 points during the European session, as the market seems to be surrounded by positive momentum following the ZEW economic report, which showed that the outlook of the Euro-area and German economies improved substantially in August from the prior few months, following the quarterly GDP read. The ZEW report is a well-respected indicator that gauges the outlook of institutional investors over the next 6-months. In August, the ZEW reported the Euro-area and the German economies reached the highest value since early 2006, something that denotes bullish momentum.
Almost every stock market in Europe is trading in the green, but most advanced less than 1%, which points out that there is still some upside room left. Most likely, this “empty space” will be filled following the reports coming out of the U.S., around 08:30am, when the market is expected to experience another surge in momentum and volume.
However, not every news report that came out during the European session can be interpreted as positive, TheLFB-Forex.com Trade Team noted. The U.K. CPI showed that the inflation read remained at 1.8% in July from one year earlier, even though the market expected a 1.5% read. July’s read is just 0.2% point below the BoE’s target of 2%, but the big problem is that the central bank is pursuing a huge inflationary policy, something that is likely to add significant points to the CPI report. In addition, since the credit crisis begun, the BoE has overestimated the disinflation/deflationary threat, something that is likely to have a very bad effect in the medium to long-term. For example, in the bank’s Inflation Outlook report issued in February, the CPI forecast was somewhere between 0-1%, which is a huge difference from today’s actual numbers.
Overnight, the U.K. FTSE added 35.76 points (0.77%) to 4,680.77, while the German Dax rose 40.41 points (0.78%) to 5,242.02.
Crude oil for August delivery was recently trading at $67.70 per barrel, up by $1.10.
Gold for August delivery was recently trading higher by $4.50 to $940.30.
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