Spreadex Market Update

Banking and commodity stocks continue to boost FTSE whilst Eurozone tempered by strong data




Up a meagre 10 points each it could be argued that the German and French indices are behaving in the same way as the US markets have done for much of 2015; good news may dissuade Mario Draghi from pulling the trigger on more ECB QE, hopes of which have caused the Eurozone indices to climb of late, meaning this morning’s data may have somewhat tempered investors’ expectations.

Despite an unexpected fall in its own manufacturing PMI, from 55.5 to 52.7 against the 53.7 forecast, the FSTE largely managed to hold onto its 50 point climb as the day went on. There are a couple of reasons for this: firstly, that manufacturing figure is still an improvement on the numbers the UK has been posting for most of the second half of the year; secondly, the index’s banking and commodity stocks, dual drags of late, remain buoyant, lifted by a largely positive BoE stress test and solid Chinese manufacturing data respectively.

Still to come is the US open, with the Dow looking at an 80 point jump after the bell. To maintain that growth it will have to contend with the Markit and ISM manufacturing PMIs, expected at 52.6 (unchanged) and 50.6 (a 0.5 improvement) respectively. Monday saw the Dow fall following weak data, unusual for the index given how it has traded throughout the year; today’s figures will test then just how far the good is bad/bad is good pattern has reversed.


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