Spreadex Market Update
FTSE nears fresh 12 month high ahead of first proper post-Brexit manufacturing PMI
Rising just 0.7% the FTSE seems to be eyeing last week’s 12 month highs as it hovers around 6770. The index is being lifted by its mining stocks, with the likes of Rio Tinto, BHP Billiton and Anglo American all jumping between 1.5% and 3%. The pound is also looking relatively solid despite the prospect of a Bank of England rate cut on Thursday; sterling’s holding just below 1.325 against the dollar and at 1.185 against the euro (having taken a big hit against the latter during the tail end of last week).
Like the rest of the Western markets Monday’s focus for the FTSE is on July’s manufacturing PMI. Markit’s early glimpse at the figure showed immediate signs of a post-Brexit impact, leaving the reading in contraction territory at 49.1; that does mean, however, there may be a bit of a room for an upwards revision, though of course the opposite could well occur.
The Eurozone has its own manufacturing issues to deal with this morning. Already the Spanish PMI has grossly underperformed both expectations and last month’s figure at 51.0, the worst reading since the end of 2013. The French figure, meanwhile, is forecast to remain at 48.6, while Germany is slightly better at 53.7; the region-wide number unsurprisingly is expected to be somewhere between the two, estimated at 51.9. Yet at the moment the DAX seems more focused on the post-stress test rise from Deutsche Bank, the stock rising over 3% to help the German index along to a 1.3% climb after the bell.
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