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09-08-2002, Fri 10:26 AM
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EUROPEAN OUTLOOK: Markets To Take Fresh Look At Trends
Euro-USD 0.9687 gain 0.0013 up 0.1%
Stlg-USD 1.5345 gain 0.0032 up 0.2%
USD-Franc 1.5110 loss 0.0015 dn 0.1%
ZURICH (Dow Jones)--European shares are set to consolidate the week's hefty gains while government bonds may eke out a slight gain. The euro starts in a narrow range against the dollar.
STOCKS: European shares should open little changed for the most part, but some profit-taking going into the weekend could send some stocks lower.
Major European indices pushed higher Thursday, boosted by some upbeat corporate news and encouraged by the IMF deal with Brazil.
Although European markets have made significant progress over the past week, the jury is out as to whether equity markets are out of the woods.
Richard Davidson, European strategist at Morgan Stanley, expects equity returns to remain low for a number of years but also thinks it is the right time to switch out of bonds and cash and into equities.
"We expect equities to enter a stabilization period over the next two to three months while confidence is rebuilt," he said.
BONDS: Euro-zone government bonds should stage a slight rebound as stocks pause to consolidate.
Euro-zone government bond prices fell but performed better than U.S. Treasurys, with the yield curve steepening in volatile, equity-driven trading.
"This is again a technical move, driven by equities and amid very high volatility, but the market remains essentially bullish, as people still anticipate central banks' rate cuts," said Rene Defossez, market economist at CDC Ixis.
The release of the European Central Bank's monthly bulletin for August Thursday was well received by bond markets, as it concluded that risks to price stability have become more balanced.
FOREX: The euro opens the session in a range of around $0.9650 to $0.9690, with indications that the market has yet to decide which way to push the European currency.
Simmering hopes that the Federal Reserve will cut interest rates as early as next week and rallying equity markets helped boost the dollar against its major rivals Thursday.
EUROPEAN OUTLOOK: Markets To Take Fresh Look At Trends
Euro-USD 0.9687 gain 0.0013 up 0.1%
Stlg-USD 1.5345 gain 0.0032 up 0.2%
USD-Franc 1.5110 loss 0.0015 dn 0.1%
ZURICH (Dow Jones)--European shares are set to consolidate the week's hefty gains while government bonds may eke out a slight gain. The euro starts in a narrow range against the dollar.
STOCKS: European shares should open little changed for the most part, but some profit-taking going into the weekend could send some stocks lower.
Major European indices pushed higher Thursday, boosted by some upbeat corporate news and encouraged by the IMF deal with Brazil.
Although European markets have made significant progress over the past week, the jury is out as to whether equity markets are out of the woods.
Richard Davidson, European strategist at Morgan Stanley, expects equity returns to remain low for a number of years but also thinks it is the right time to switch out of bonds and cash and into equities.
"We expect equities to enter a stabilization period over the next two to three months while confidence is rebuilt," he said.
BONDS: Euro-zone government bonds should stage a slight rebound as stocks pause to consolidate.
Euro-zone government bond prices fell but performed better than U.S. Treasurys, with the yield curve steepening in volatile, equity-driven trading.
"This is again a technical move, driven by equities and amid very high volatility, but the market remains essentially bullish, as people still anticipate central banks' rate cuts," said Rene Defossez, market economist at CDC Ixis.
The release of the European Central Bank's monthly bulletin for August Thursday was well received by bond markets, as it concluded that risks to price stability have become more balanced.
FOREX: The euro opens the session in a range of around $0.9650 to $0.9690, with indications that the market has yet to decide which way to push the European currency.
Simmering hopes that the Federal Reserve will cut interest rates as early as next week and rallying equity markets helped boost the dollar against its major rivals Thursday.