Hopes and optimism spread through markets on Wednesday despite that the Slovak Parliament rejected a plan to increase the size and power of the European Financial Stability Facility fund, as investors believe EU leaders will eventually agree the plan, which encouraged investors to target higher yielding assets, as equity markets rose in Europe and the United States, while commodities gained, and major currencies rose against the U.S. dollar.
The Slovak Parliament is expected to vote again on the plan after the government has resigned as a result of the failed vote on Tuesday; however, expectations signal that the Slovak Parliament will eventually pass the plan.
Meanwhile, the earnings season kicked off from the United States with disappointing results from Aloca, the first company among the DJIA to announce its earnings, however, traders were still focused on Europe, noting that investors will now be looking at the FOMC Minutes, which will be released later on Wednesday, although the FOMC Minutes are not expected provide anything new for markets.
Stocks in the United States were higher by opening on Wednesday, where the Dow Jones Industrial Average was up by nearly 1% to trade around 11,528, while the S&P 500 index was up by nearly 1.30% to trade around 1211. European stock indexes were also higher before closing on Wednesday, where FTSE 100 was up by nearly 0.90% to trade at 5445 and the DAX was up by nearly 2.40% to trade around 5005.
The U.S. dollar fell sharply against a basket of major currencies on Wednesday, where the U.S. dollar index was trading at 76.96, compared with the opening level at 77.78. The Euro rose strongly against the Dollar, where the EUR/USD pair traded around $1.3799, compared with the opening level at $1.3633, the British Pound also gained against the Dollar, where the GBP/USD pair traded around $1.5783, compared with the opening level at $1.5580, and the U.S. dollar rose against the Japanese Yen, where the USD/JPY pair was trading around 77.43, compared with the opening level at 76.70.
Gold prices rose on Wednesday to trade now around $1678 an ounce and crude oil prices also rose to trade around $86 a barrel.
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