Afternoon Market Update – 03/01/2017 – by Jaz Singh

European equities look to be heading for their third day of gains with banking and mining stocks taking the lead.  The DAX currently trades near the 11600 level with the Stoxx Euro 600 rising 0.6 percent this session. This comes off the back of positive news from the Asian session with Chinese Manufacturing PMI beating expectations. Equity bourses are also benefiting from an uptick in crude oil prices. WTI has gained some 2 percent today reaching the $55.25 handle before finding upside resistance. This is crude’s highest level since July 2015 and comes after Kuwait cut its production. We see a selloff in the fixed income space this morning as the prospect of faster inflation across the globe is priced in. The German bund extends its sell off from yesterday’s session, falling by some 50 pips. In FX markets we see the dollar leading the gains, up over 1 percent against its major counterparts as the Trump trade persists. Cable seems to be stuck in a 50 pip range this morning while USDJPY is heading towards its high of last month seen at 118.70. This afternoon we have German CPI data as well as ISM Manufacturing PMI and Prices Paid data from the US.