European markets are on a firmer footing today, relative to past three trading sessions, as the positive sanguine filtered from the Asian markets. This not to say, that the anxieties about the emerging markets are vanished; no, they are still there, and these worries caused the sell off in the markets. Many have started to compare the emerging market currency sell off with the 1997-98 melt down. However, we do not think the situation is that contaminated, and especially, the central banks of these countries are taking progressive steps to encompass this meltdown. The Reserve Bank of India last night, increased the interest rate to combat it’s falling currency’s value. Today, we also have the meeting of the Turkish Central Bank, who may use one of their tools to stop its currency from further devaluing.
US futures are also trading higher this morning, despite the tech giant Apple posted a disappointing forward outlook last night. We think that the revenue number and earning per share were still extremely good and with new iPhone in production, with a bigger display, the bellwether apple will easily be able to shake the gloom soon. Having said that, why apple is following Samsung strategy to lower their future outlook for Q2 is something daunting, but if we look at the bigger picture of the company, we think this sell off could be a buying opportunity.
The economic docket today for the US is flushed with incoming data. Last week, it painted a mixed picture, and the focus for this week will be, if the doom and gloom continues. The durable goods order is expected to rise by 1.8% from its November reading of 3.4%. Consumer confidence data is also due at 15:00 GMT, and the expectations are for a decline to 78 from its previous reading of 78.1.
Back in Europe, we do have UK’s GDP data and the expectations are that we may see an expansion of 0.7% during the fourth quarter. We have seen the unemployment, falling in the country, and this should address the wage concern, which has been lagging as compared to inflation.
Disclosure & 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. by Naeem Aslam