• UK stock market commentary (May 22, 2015): Traders set to hang on central bankers words

    Choppy sessions with little change characterised yesterday’s session and we’re set to get the same on today’s open with marginal gains as traders search for direction. Also keeping traders in a cautious mode will be key speeches from Mario Draghi, Mark Carney and Janet Yellen today. Previously it looked as though the BoE and Fed may diverge from the ECB, but growth in the US and UK hasn’t picked up any momentum so bulls will be on the hunt for some dovish comments to kick start another leg higher.

    The US economic data was again a mixed bag yesterday. On one hand existing home sales fell 3.3% in April after a two year high in March, rather disappointing after we saw strong results in the housing sector lately. On the other hand, the index of leading economic indicators rose by most in 9 months. Amid all that, the Dow Jones edged higher, gaining 20 points to 18,292.5.

    The ECB emphasized the importance of staying the course in its assessment of monetary policy meeting. The Governing Council thinks the euro area economy ‘gained momentum at the beginning of 2015’. However, the shared currency stopped for a breather, closing just marginally higher (7 pips) at 1.1114 versus the greenback.

    Concerns regarding inventories reaching capacity began to look farfetched as crude stockpiles slumped for the third consecutive week. Wondering whether that is beginning to look like a trend, investors pushed the WTI prices $1.84 up to $60.66 a barrel. Gold prices lost $3.3 to $1207.00 yesterday as US unemployment benefits declined.

    Contributed by Capital Spreads
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