Equities shake-off from yesterday' sell-off, post gains on Friday


Friday looks like an optimistic day and markets are in a risk-on regime once again.

The European Central Bank left policy unchanged on Thursday, as widely expected, and marginally lifted its growth outlook for the year. Moreover, the central bank said it is OK with the current exchange rate of the EURUSD pair, and it looks like it will allow the euro to strengthen further. The year-end target at 1.25 is still intact for many analysts and traders. 

Stocks crashed yesterday, and US indices have undergone a steep sell-off again. However, they did not fall below this week's lows; thus, the short-term outlook seems rather neutral. 

On Friday, indices are seen rallying, and US markets are 0.5-1% stronger in the Frankurt session, while EU bourses are lagging a bit. 

Later in the day, the US CPI numbers are due, with the year-over-year inflation expected to improve to 1.2%, but it is still well below the Fed's target between 2 - 2.5%/ The core inflation will most likely remain at 1.6%.

Finally, both major oil benchmarks are down around 6.5% for the week and headed for the second week of declines, as hopes dim for a steady recovery in fuel demand amid signs of second-wave coronavirus outbreaks.
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