European markets gain on Draghi statements

By Gautam Broker, Research Analyst at CNBC-TV18

European markets ended high amid low volumes on Monday, aided by Draghi statements.

European Central Bank President Mario Draghi reiterated willingness to buy short term paper in a private session with European Union parliamentary committee.

He says there is very little monetary financing involved in buying bonds upto 3-year maturity.

Price stability cannot be pursued at a time when the existence of the Euro itself is in question.

Draghi statements were in line with ECB stance at the August meet; he is just making efforts to build consensus.

Italian 2-year hit a 5-month low post report on ECB.

German Finance Minister says he doesn’t expect the constitutional court to block ESM on September 12.

Moody's cut outlook on Aaa rating of the European Union to negative from stable.

Andalucia, Spain's largest province joined aid queue (fourth in line), asking for euro 1 billion.  

EU PMI’s was positive yesterday. EZ Manufacturing Purchasing Managers' Index (PMI) for August rose to 45.1 versus 44 MoM and Germany's increased to 44.7 versus 43 MoM.

There was a significant improvement in France Manufacturing PMI for August went up to 46 versus 43.4 MoM.

European markets at close: CAC gained 1.2%. DAX was up 0.6% and FTSE rose 0.8%. Spain moved up 0.2% and Italy rallied 1.1%.

US equity markets were shut yesterday due to labour day.

Asian markets were flat today.

Currencies

Euro was firm on ECB hopes.

Euro rose above 1.26 to the US dollar today morning.

Dollar Index holds the 81 level.

Yen hit a high of 78.2 to the US dollar yesterday

Commodities

Commodities were up despite dismal China data; stimulus hopes aided upside. 

Brent crude rose 1% to close at USD 115.8 a barrel on Monday as against USD 114.5 a barrel on Friday.

Gold upmove continued, which was at highest levels since mid March.

Gold was up 0.6% at USD 1696 an ounce on Monday after 2% rally on Friday.

LME Copper gained 0.8% yesterday.

Brent crude rose above USD 116 a barrel today

What to watch out for

Reserve Bank of Australia (RBA) rate decision

Eurozone PPI

US Markit PMI

US ISM Manufacturing Index

US Construction Spending

US Vehicle Sales