The European Union (European Union) It is an important part of the global economy. Its gross domestic product is over $16.6 trillion, making it the second largest economy in the world after the United States. Besides the non-EU countries, Europe has a large GDP.
However, its significance is not limited to these numbers. In fact, the European trading session is of great importance to all traders because it Offers many opportunities.
In this article, we will look at how the EU session is traded and why it is important.
EU trading session hours
The Usually the European session is the second to Asia. In Europe, most marketsincluding Amsterdam, Paris, Lisbon and Brussels Open from 9 AM to 5:30 PM GMT. These times are between 3 AM and 11:30 AM ET.
In the UK, markets start early at 8am and close at 4:30pm. Meanwhile, in Moscow, the market opens at 9:30 and closes at 7 pm. The chart below shows the European trading sessions.
Major European stock indices
a stock market index It is a financial asset Tracks stock market performance. The most famous indices in the world are the Dow Jones, Nasdaq 100 and S&P 500. Europe also has some Of the most Popular Indicatorsalthough most of them are much smaller than their American counterparts.
The most popular European indicators are:
- DAX Index – The DAX index is made up of the 40 largest companies in Germany, including Volkswagen, SAP and BMW. Its total market value is around 1.25 trillion euros.
- FTSE MIB – This is an index made up of the largest companies in Italy such as Campari, Generali and Intesa Sanpaolo.
- CAC 40 – This is an index made up of the largest companies in France such as LVMH, L’oreal, BNB Paribas and others.
- AEX . indicator – This is the index of the largest companies on the Amsterdam Stock Exchange. Some of the big companies in the index are Unilever, Heineken, Adyen and ING Bank.
- ibex 35 – This is an index that covers the 35 largest companies in Spain. The largest members are Inditex, Iberdrola and Banco Santander among others.
Main events of the EU session
The European session is important because of Major events that occurred during the period. For example, the European Union has 28 member statesAnd the that publishes its economic data on a regular basis.
In addition to, Europe plays an important role in global geopolitics Since it has a close relationship with the United States. Some of the highlights of the EU session are:
- European Central Bank (European Central Bank) – The European Central Bank is the second most important central bank in the world after the Federal Reserve. It meets eight times a year and its decision tends to affect European stocks and the euro.
- inflation Eurostat publishes European inflation figures twice a month. Usually, preliminary figures for the current month are published, then official figures for the next month. Traders are also watching inflation data from key countries such as Germany and France.
- Job data The European Central Bank pays a lot of attention to the labor market in Europe. As such, it focuses on the monthly figure that Eurostat publishes.
Other major events that occur in the European session are the Eurogroup meetings, OPEC meetingsAnd the corporate profits. In fact, US companies that publish their results in the pre-market session usually do so during the European session.
Why is the European session important
There are many reasons why the European session is important in the market. First, the session is usually Between Asia and America. As such, it is possible to trade financial assets from Asia, Europe and North America.
Usually European market Interfering with the Asian session For a number of hours since most of the Asian markets like Hong Kong and Japan were closed around 1pm EST. He. She and then intersect With the American sessionwhich usually opens around 09:00 EST.
Second, the European session is important Because of the main events We mentioned above. All of these events are moving European and global assets as well. For example, it is common for the European Central Bank (ECB) to decide interest rates to move US indices such as the Dow Jones.
Third , The forex market tends to be very volatile during the European trading session. this happens Because of the role of the euro in global trade.
Related “ How to trade profitably in periods of high volatility?
At the same time, many Economic figures show from Canada and the United States during the European session. Among the most important figures released during the US session were jobs and inflation.
Benefits of investing or trading EU shares
There are several reasons to trade and invest in European stocks. for the first time The largest European country manufactures Most of them Money from outside its borders. This includes companies like LVMH and Porsche that earn most of their money overseas.
Related “ Why should you trade from the EU
secondly, European indicators such as CAC 40 Show Investors and Opportunity to invest in industries not available in the US. For example, CAC exposes investors to the largest luxury brands not available in the United States.
Third, EU stocks be seen as being cheaper than their American counterparts due to the significantly weaker euro. For example, the DAX has a PE of 10x, which is much lower than the S&P 500 16x.
Disadvantages of trading EU shares
there Two important negatives that occur with the trading of European Union shares. First, unlike the United States, the The European Union is made up of countries that speak different languages. As an investor, it can be a bit tricky It is difficult to study and explain these companies. As such, most people focus on the major companies and ignore the smaller ones.
Second, unless Your broker gives You are being able to For European stocks, it is very difficult to trade and invest in European stocks.
Summary
The European trading session is an important session in the market. It is made up of some of the largest companies in the world such as BASF, BMW, SAP and others. The bloc is also made up of key institutions such as the European Central Bank (ECB) and the International Energy Agency.