Mixed preliminary PMIs for September weigh on European indices

US stocks advance on Fed’s inaction

US stocks advanced on Thursday following the gains in tech sector after the Fed’s decision to leave the interest rates unchanged. Fed Chair Janet Yellen said on Wednesday after the two-day Fed meeting that the rates are likely to be hiked soon to prevent overheating of the rebounding economy. Now investors will become focused on economic data which may shed light on timing of US Fed future rate hikes. Currently the chances for the Fed rate hike on December meeting are 52% for 0.25 p.p. hike and 6.5% for 0.50 p.p. hike, according to FedWatch tool. US dollar index, a measure of a greenback’s value against a basket of six major currencies, fell to a 10-day low of 95.048. Three major US indices closed in the black for 3rd straight session. S&P 500 index rose 0.45% to 2,172.9 with all its major sectors closing in the black and real estate sector driving the index up as it added 1.6%. Dow Jones industrial average added 0.39% to 18,364.96. Nasdaq composite advanced 0.62% to 5,328.15 having hit a fresh intraday high. Amazon stocks gained 1.9% to surpass $800 for the first time on positive report form analysts. Apple stocks advanced 0.9% which had a positive effect on S&P500 index. Trading volume in US exchanges was in line with the 20 last trading days average of 6.8bn stocks on Thursday. As to economic data, unemployment claims unexpectedly slid last week to a 2-month low. Today at 15:45 CEST the US manufacturing PMI for August will be released by Markit, the outlook in neutral. At 19:00 CEST the Baker Hughes oil rigs count will come out.

European stocks pull back from 2-week highs

European stocks were on decline on Friday retreating from the 2-week high hit yesterday after US Fed decided to leave its rates unchanged and on disappointing PMIs. The flash composite PMI for Eurozone fell in September to a 20-month low of 52.6 although it was expected to be 52.8. STOXX EUROPE 600 index lost 0.7% from its 2-week high hit a day before but stays on track for 2.3% weekly gain. German’s DAX 30 lost 0.33%, French CAC40 fell 0.64% while British FTSE100 lost 0.18% so far today. EURUSD hit a weekly high of $1.1250 on Thursday. European banking sector slumped 1.3% as Fed did not hike the rates after rally on expectations of the hike. Banco Santander, HSBC and Intesa Sanpaolo banks lost from 1.6 to 2.9%. Mining sector was also looking down.

Asian stocks hover around 14-month highs on Friday while Nikkei falls

Asian stocks were mostly on the rise on Friday as Central Banks decided to stick with loose monetary policies with only Japanese stocks looking down on stronger yen. Japanese Nikkei fell 0.3% to 16,754.02 as yen strengthened over the market holiday on Thursday and investors were booking profits after strong gains in financials, especially banks and insurance companies. Key Japanese exporters suffered from stronger yen with Honda Motor down by 2.4% and Toyota Motor down by 3.16%. USDJPY is traded today at 100.91 after 100.10 on Thursday. MSCI’s index ofAsia-Pacific shares outside Japan advanced 0.15% helped by gains in Australia. Chinese blue-chip index CSI 300 dipped 0.3% to 3,282.84 while Shanghai Composite fell 0.1% to 3,039.62. Hong Kong’s Hang Seng index fell 0.1% to 23,747.37 with consumer and industrial stocks leading the decline.

Oil eased ahead of OPEC meeting

Oil futures prices dipped following two days of gains ahead of the OPEC members meeting next week in Algeria where the talks on oil production “freeze” will go on. Brent futures are traded at $47.27 per barrel having hit a 2-week high of $47.83 a barrel a day before.

Gold retreats today as US dollar steadies

Gold retreated on Friday from its two-week highs as US dollar steadied. Still, this week may be most profitable for gold in two months as US Fed did not raise the interest rate this week. Gold price depends on US interest rates as all precious metals are non-yielding assets which means higher rates raise the costs of holding the bullion. Spot gold lost 0.1% to $1,334.68 an ounce today but is on track to close the week 2% higher. US gold futures with delivery in December fell $5.30 to $1,339.40 an ounce. Holdings of the world’s largest gold-backed ETF SPDR Gold Shares increased 6.5 tonnes on Thursday.

Silver fell 0.3% to $19.78 an ounce having added as much as 5.5% this week.