Markets melt up
Traders and investors caught short heading into the FOMC scrambled for cover in Europe and the US, in many cases driving indices to their best one day performance for 2015.
Traders and investors caught short heading into the FOMC scrambled for cover in Europe and the US, in many cases driving indices to their best one day performance for 2015. Overnight trading delivered broad market gains between 2% and 3.5%, despite lower commodity prices and weaker data.
In the long run, markets are driven by fundamental factors. However short term movements are more complex, and market positioning can trump all other factors. General gloom on growth, a failed Santa rally and oil prices meant traders and investors were short or underweight heading into the Fed’s last meeting for the year. Volumes were well above recent averages. Most markets finished near their highs, pointing to potential further gains over the coming trading sessions.
Stronger UK retail sales supported the rallies, but weaker US services activity and Philadelphia business conditions were ignored. Futures markets are indicating gains better than 1% at opening calls across the Asia Pacific region today. However, strong rises yesterday and falls in oil and copper overnight may moderate enthusiasm during trading today.For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.