Most Asian markets were modestly in the green overnight after yesterday's rebound in stock markets in the US.
The S&P 500 has enjoyed one of its best days since March, with performance driven by cyclical stocks, while small caps gained some 3%. European equities have opened up positively, and US futures have been mixed.
Monday’s volatility has calmed for the time being though summer markets and thin liquidity can always throw up new curveballs. The VIX, sometimes known as Wall Street’s fear gauge, has dropped back from above 25 to below 20.
Sterling was in the green as well, last strengthening 0.46% against the dollar to $1.3691, and fainting 0.39% on the euro to €1.1613.
Technical S&P Marker
The recent low in the S&P500 at 4,233 is now significant as a clear support line in the sand. The scale of yesterday’s rebound means any renewed weakness through this level could lead to increased volatility and further market ructions. The 50-day moving average also held up the main US equity index and has acted as reliable support this year. If markets stabilise into the end of the week, dip buyers and the bulls may look to push on higher. A more protracted global recovery means policy stimulus remains in place for longer.