Forexpros – European shares bounced from a two month low as Spanish fears diminished and traders anticipate a positive U.S. Beige Book report.
At the close European trade, the EURO STOXX 50 gained 0.85%, France’s CAC 40 climbed 0.62%, while Germany’s DAX soared 1.03%. Meanwhile, in the U.K. the FTSE 100 added 0.70%.
Risk on sentiment firmed up as the yield on Spanish 10-year bonds pulled away from four-month highs hit earlier, but investors remained cautious amid concerns about the government’s ability to cut its deficit.
Spanish yields declined as ECB Executive Board member Benoit Coeure stated “Will the ECB intervene? We have an instrument , the securities markets program, which hasn’t been used recently but it still exists.” Signaling the ECB may become involved to assist the struggling nation.
Adding to the stock positive sentiment, Prime Mister Mariano Rajoy stated his country will not require a bailout and that the country’s deficit target remains “unconditional.”
Rajoy said that the government will push forward the program to tackle tax and employment fraud this month, as well as reforms in the banking and healthcare systems and privatizations of public sector assets.
Meanwhile in the U.S., government data indicated import prices advanced more-than-expected in March, posting the largest monthly gain since April 2011.
The U.S. Bureau of Labor Statistics said import prices rose by a seasonally adjusted 1.3% in March, above expectations for a 0.8% gain.
Import prices for February were revised to a 0.1% decline from a previously reported increase of 0.4%.
Banks led the gains as HSBC stated it sees a “glimmer of light” for the banking industry and upgraded the sector to overweight for the first time in four years.
Deutsche Bank climbed 2.3%, Barclays added 2.8% and Banco Popolare di Milano soared 5.9% on the sector upgrade and positive Spanish progress.
Automobile manufacturers also advanced with Volkswagen adding 3% and BMW gaining 2.5%.
U.S. stocks are trading sharply higher with the Dow up 0.86%, the S&P 500 higher by 1.01% and the Nasdaq ahead 1.02%.
On Thursday, Traders are anticipating U.S jobless claims, the trade balance, as well as Core PPI. The French CPI and European Central Bank’s monthly report are also on tap.
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