Mixed sentiment before the start of the European session 31.05.2017

The sentiment on the stock market before the opening of  the European exchanges are mixed. The new political risks, following the latest UK survey, will make investors worried and we can see short-term sales. Additional caution can be expected because of the NFP from the United States on Friday.

The London FTSE is expected to open at 7536, the German DAX at 12587 and the French CAC at 5298.

The banking sector is likely to remain under pressure after the rumors of early elections in Italy and the tensions created by the banking sector in China due to the large exposures in housing and municipal loans. Today, reports will be published by Metro Bank and Deutsche Boerse.

On the FX market we can expect new increases in the EUR, as there are already a number of indications for ending the short-term correction of the singe currency.  The pound is likely to remain under pressure as the June 8, 2017 elections are approaching. JPY is likely to rise due to the expectation of caution in the risky asset market. The dollar remains quite sold out, as new short positions are not logical before correction.

From the economic calendar, investors will concentrate on the data about the Unemployment change from Germany at 10:55, Eurozone consumer price index at 12:00, Pending home sales in the US at 17:00.

Trader Nikolay Georgiev

Read more:

• USA ADP Nonfarm Employment Change: 202K vs 160K
• Iran response was ‘too fast and too furious’ on the U.S. airstrike
• USA – ISM Non-manufacturing PMI: 55.0 vs 54.5
• Top 5 things to watch on Tuesday
• Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making