Few markets were open during Monday. However, as we assumed yesterday, workaholics got their reward for not being at vacation. Italian FTSE MiB jumped 1.73%– the first hike after staying at the same place for 3 last sessions. It is this index’ highest level since January 15 of 2016: banks rallied and a strong manufacturing report improved sentiment. It’s not obvious whether banks continue to go higher today, as the sale of three small Italian banks to UBI was delayed at European Commission's request last evening, as reported by Reuters. However, it’s more than possible, the index will continue going up – even if it will not be the best one today.
German DAX showed a good result yesterday as well. It climbed 1.02% to the highest point in 17 months. French CAC 40 also did well.
Fundamental reasons can be found in economic data releases, when multiple Manufacturing PMIs were published last morning. No one of them was worse than expected, when the Spanish, the Italian and – the most important – German ones surpassed analysts’ expectations and the French and the European ones matched the anticipated results. This morning it was China’s time, and Caixin Manufacturing PMI was published to be well above the predicted result of 50.7. The result is 51.9 – the best result from July 2014 and from February 2013 before that. For sure, this fact should impact world markets, and especially those in EU and UK. More than this, exchanges, that were closed yesterday, should close the gap with DAX, MiB, CAC etc, therefore we will, probably, see very good results in Britain, Switzerland and some other countries.
Additional German and British economic data are due to be released later today, and in case it will be good enough, European stocks can surge, when united currency and pound can gain some ground against US dollar. Worse than expected results can slow down shares at the continent, when USD will, obviously, continue going stronger against its rivals in this case. Both cases are not really good for gold, as when the main question is which one of good world economics is the best, no place for safe haven in investors’ minds. The metal lost 6 dollars per ounce this morning, and it’s traded at 1152 now – yet, 30 dollars above its minimum at December 15 last year. Though, it is still a very low level, we did not see since January 2016 (before December 2016). Therefore, the upward correction can still run a bit.