Demand for equities was boosted by speculation that the EU was working on a plan to help Spain resolve its fiscal problems and yesterday’s positive Beige Book survey of regional economic conditions, which said the US economy grew at a moderate pace.
In addition, stock markets received support from expectations of further stimulus from the European Central Bank (ECB) and the Federal Reserve.
ECB president Mario Draghi said yesterday that downside risks to the euro zone had increased and the central bank was prepared to act.
Today, Fed chairman Ben Bernanke is due to testify before the Congress – which will be his first speech since last Friday’s dismal jobs data, which showed that the US economy created only 69,000 jobs last month.
Traders in the US will have more jobs data to digest today with the Labor Department set to release its weekly jobless claims report.
Here in the UK, the Bank of England will announce its decision on interest rates, which are expected to remain at 0.5 percent.
“We would be cautious of the rebound in risk appetite as many uncertainties still remain and the current move may just be a corrective relief rally rather than a more significant shift in sentiment,”
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