Positive European data is not so positive at the end

Retail sales in Germany ran at 2.9% setting in motion the engines of the economy, the CPI for the euro zone was reported as -0.3% (better than expected), while in Spain Unemployment Change was announced as -13.5k revitalizing another part of the euro economy. Markets were thrilled by this news and yet the performance was not as expected. The German Stock Market index DAX went down to the 11260 minimum while the EURUSD pair once again hit its resistance of 1.1200 and bounced back. It looks like market participants are waiting for the QE implementation in order to believe again in a real economic recovery. The final details will be established on Thursday in Cyprus when we can anticipate a new wave of appreciation for the European market.

Meanwhile, Ukraine is struggling to revitalize the national currency by raising the interest rate to 30%, while extending a rule which obliges companies to sell 75% of their foreign currency earnings. The peace treaty still needs time in order to become reliable and for now market participants are trying to interpret and digest the murder of  Boris Nemtov.

On the other side of the monetary policy camp, India is reducing again the interest rate at 7.5% as its economy is struggling to keep its macroeconomic parameters safe. They also maintained the import duty for gold at 10%, fact that determined buyers to cancel their demand. The effect was immediately visible on the price of gold, which fell back to 1200 dollars per ounce level after the announcement.

The American stock market is gaining momentum while the US dollar is appreciating as the economy seems to have been reaching its natural unemployment rate and continues its positive data reporting one after another. Today the ADP report will be published while the market is waiting for Friday’s NFP figures report to be published. The expectations are high, so it is probably that any figure closed to the actual ones will please the markets whose hope is fueled by the confidence in an interest rate increase by mid 2015, even possibly by the next FOMC meeting which is in April.

The oil market is apparently located at 50 dollars for WTI and 60 dollars for Brent, enjoying these levels to which producers probably breathe relieved. Today the Crude Oil Inventories are doue to be announced which will demonstrate the US market perspective for the Crude oil. Even the expectations tend to reduce the reserves, risk of surprises are kept in alarming parameters.