• UK stock market commentary (September 17, 2015): Not one for the faint of heart

    European equities are set to start with gains on the open as the bulls just get the upper hand. On the eve of the Fed rate decision, It looks as though the bulls are betting that the hawks will have to wait a little longer for lift off following yesterdayís weak US inflation data. However, trading this economic release isnít just as simple as rate hike = bearish, no hike = bullish. Weíll also be getting the Fedís economic projections for the next 2 years and Janet Yellen will appear at a press conference to explain her action or inaction, which will collude to muddy the exact impact it should have on markets. There are too many scenarios and combinations of event s this evening to make an educated guess with any accuracy with a probability above random, so if you donít have an appetite for volatility; then maybe you should stay out of this one.

    A sharp rise in oil prices lifted the US stocks yesterday with Chevron leading the pack after an almost 2% jump. The Dow Jones rallied 142 points to 16,765 as investors were still crunching the numbers for extra clues on the Federal Reserveís decision.

    A surprise fall in the US inflation last month sent the greenback 18 pips lower versus the euro to 1.1286. It should be noted that inflation data in the euro zone also disappointed triggering earlier losses for the shared currency.

    US crude inventories declined by 2.1 million barrels last week taking the energy complex by surprise and in turn triggering a 5.7% surge in oil prices. No fear of inflation has tamed concerns of interest rate hike which in turn boosted demand for gold (up $13.4 to $1118.8).

    Contributed by Capital Spreads
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