European stock markets gained a second session in a row as the outlook for economic growth appear to be getting brighter. It was confirmed today by the IFO release which proved to be higher than expected. What’s more, European (and US as well) stocks could have benefited from a rally in oil prices which is arguably an effect of the decision announced yesterday by Saudi Arabia as it intends to curb its oil export next month by all but 1 mbpd. Two grades of oil are going up more or less 3%.

The global economic outlook has become even more reassuring given a revised forecast of China’s GDP where economists now predict an increase in GDP in Q3 will amount to 6.7% yoy and 6.6% yoy in the last quarter, according to the median of 57 economist estimates in a July 17-24 Bloomberg survey. Both forecasts were 0.1pp higher than a month earlier.

The US indices are increasing as we are less than 3 hours to a close. All three major indices are marking gains ranging from 0.1% to as much as 0.6%. Moreover, it’s worth stressing that the US conference board index came in much above estimations being one of the few figures which beat expectations. The gauge rose to 121.1 while just 116.5 was expected. This economic indicator has been steadily rising since 2012 and also exhibits a close correlation with the more widely viewed University of Michigan survey.

There’s been a growing scrutiny on political events in the US once more among market participants of late with this morning an inflammatory tweet from Donald Trump hitting the news wires. The US president labelled Attorney General Jeff Sessions as “very weak” when referring to his position on investigating Hillary Clinton’s emails and there is an increasing possibility that Sessions’ days in the role are numbered. The latest Twitter attack comes amidst reports the president is consulting advisers about possibly firing the country’s top prosecutor.

The New Zealand dollar was one of the worst performing currency during today’s session following the report about an outbreak of disease amongst cows in New Zealand which could threat to disrupt the dairy trade. The foreign disease is called mycoplasma bovis and can cause udder infections, pneumonia and arthritis. 14 cows so far have tested positive for the disease and around a further 150 have shown signs that they may also be infected. The movement of stock has been stopped form the effected property in an effort to contain the outbreak, with no signs at the moment that the disease has spread.

The common currency has been rising of late, the same scenario has not been experienced by the European equities which have fallen at the same time. Even as a growth acceleration in Germany appears to gather momentum which is confirmed by many soft metrics such as PMI or IFO, the European stock markets could become under pressure which could come from the negative correlation with the euro. Having said that, Goldman Sachs analysts seem to have a different mind.

Given that the US Federal Reserve is beginning its two-days meeting today, let us present our preview. Even as no changes in policy are expected, markets’ attention will be on rhetoric which could suggest a date when the balance sheet begins unwinding.