Spreadex Market Update
European markets manage to out-muscle weak US open
Bad news in jobs growth in theory delays a rate hike and prevents the dollar getting any strong, an eventuality the markets have been rising on of late. Yet, at the same time, bad news is bad news and the combination of weak ADP non-farm data and the worst ISM manufacturing PMI figure since last May saw the Dow’s three digit declines return with a vengeance after the bell.
The negativity wafting over from Wall Street initially hampered the Eurozone’s growth, with the DAX falling away from the 12100 highs seen earlier in the day. The robust gains felt after the wave of strong manufacturing data in the region eventually managed to outweigh the drag of a poor US open and the continued hemming and hawing over the Greece issue, leaving the Eurozone with a strong rebound after yesterday’s losses. Yet there are reports circling that Greece might be unable to make its €450 million repayment to the IMF next week, with Athens moving to deny these claims; regardless, the noose is rapidly tightening around Greece’s fiscal stability, so it will be interesting to see what effect this news has on the ongoing reform talks.
The FTSE was managed to out-muscle that weak US open, holding onto its modest gains despite a worsening trading environment as the day went on. Relative stability in commodities meant that the UK index wasn’t damaged by its oil and mining stocks, with a slight fall in US crude oil inventories securing a positive day for Brent Crude. Another strong PMI performance tomorrow, this time in construction, could secure a positive end to this abbreviated Easter week for the FTSE.
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