European stocks soar despite a low confidence score, major US indices up 1.8%, oil steady and ASX futures 45 points higher

A slightly lower-than-expected read on economic and industrial confidence in Europe did nothing to hold back buyers of stocks there, with Germany's DAX rallying by 3.36%, in line with most others. After failing to trend lower throughout November and the first half of December, the euro (EURUSD) currency has accelerated its sell-off, which began in mid December. This is no doubt helping fuel optimism in Europe, after the European Central Bank tried to wish the currency pair down to these levels for so long. It is now trading at US$1.1794, as illustrated on today's first chart, which represents a convincing break below its 2010 low. This will have triggered new short positions and exacerbated the move, which is quite significant given that the EURUSD was trading at US$1.40 earlier this year.

Premium car makers in Europe should be enjoying conditions there, with stronger export markets desirous of luxury brands at a time when the cost of borrowing remains cheap in Europe and the euro gets more attractive to foreign buyers. Three stocks that look to have the potential of breaking their medium-term highs if all remains sound in Europe include the following (all available as either CFDs or fully-paid shares on the Rivkin Trader platform), which are listed on today's second chart:

  • Volksvagen AG (VOW, in orange)
  • Bayerische Motoren Werke AG (BMW, in blue)
  • Daimler AG (DAI, in black)
While European retail sales surprised with a year-on-year figure of 1.5% versus 0.2% expected, both Eurozone economic confidence and industrial confidence for December were lower than expected. However, there are reports emerging that Germany will work with whatever Greek government is elected on debt restructuring and that a Greek exit is looking less likely, which was almost certainly behind what pushed stocks in Europe and the US so hard last night.

NB: Next week I will be publishing my morning research from Bali, where I will be test-driving Rivkin's "Luxury Trip to Bali" competition. This will serve as a reminder to everyone that by opening a Rivkin account of any kind before 31 January, you will be put into the draw to win:

  • Two business class return Garuda flights to Bali
  • Three nights at The Chedi Ubud
  • Three nights at The Legian Seminyak
  • All transfers
These is a premium trip with no expenses spared, we'll be spending up to $8,000 on the winners to make sure it's a special trip. Visit www.rivkin.com.au/bali for all the information and terms and conditions that apply and phone a Rivkin Relationship Manager on 1300 748 546 today to find out how you can get involved.


Today’s charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to get your free $100,000 demo account.

Upcoming economic announcements: AU retail sales out at 11:30am, Chinese CPI & PPI out at 12:30pm, US employment report out at 12:30am, all Sydney time.

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