European stocks and the euro rose on Monday, battling back as investors bet that Prime Minister Matteo Renzi's resignation after voters rejected his constitutional reforms would not trigger a snap election in Italy.
For obvious reasons, all the focus is on the OPEC meeting. As we pointed out the possibility yesterday, oil prices have bounced back very strongly today on renewed hopes that oil ministers will, after all, be able to hammer out a deal later on to limit crude production.
An air of caution filtered throughout the equity markets on Tuesday with the FTSE 100 being the only real mover as the index continued its run above 7000. While strong performing mining stocks were seen as the catalyst driving the FTSE 100 higher.
European stock markets have started Friday’s session brightly, extending their advance from the late afternoon rebound on Thursday. The rally has probably taken many people by surprise, although this shouldn’t be the case given that the markets in both the UK and United States are still very close to their all-time highs.
The financial market was expected to start in the red too but with the dollar running things and little data to get stuck into, the focus stayed on Europe and the record-high FTSE as the pound's tumble improved the look of its international firms' profits.
Britain’s pound slumped to a three-decade low on Tuesday as concerns over Brexit were compounded by the renewed strength of the dollar on resurgent U.S. interest rate hike expectations. Sterling was at its weakest since 1985, hit by a growing sense that the UK may be heading for a 'hard' Brexit where it severs links to the EU's single market in favour of total control over immigration.
Financials markets may have found their black swan and it had nothing to do with Donald Trump, Hillary Clinton or any of the usual controversies we’ve speculated on over the months. No, the Germans may have their own Lehman moment coming just around the corner with Deutsche Bank. A zerohedge.com story says Merkel cannot politically afford to bail out the troubled bank.