Spreadex Market Update
US indices join European markets in the red as commodity sell-off continues
That Chinese currency move boosted the dollar this Tuesday, something that, of course, had bad ramifications for the Dow Jones. This merely exacerbated the Dow’s negative situation, with the index already suffering from hawkish comments by Atlanta Fed President Dennis Lockhart, who yesterday claimed lift-off was ‘close’. This afternoon then brought with it better than expected preliminary labour unit cost and non-farm productivity figures, merely adding to the case for a September rate hike. Add into this the pretty bleak commodity situation weighing on Europe, and the US markets didn’t really stand a chance.
This afternoon saw the European Commission confirm that a third bailout agreement exists ‘in principle’, but beyond that concrete news has been limited. The Greek parliament is expected to vote on the measures on Thursday, before the deal gets passed to the highly scrutinising eyes of the Eurogroup. No eyes will be more scrutinising than those of Wolfgang Schauble, with Germany seemingly still not completely sold on the current conditions of the agreement. Either way, the DAX suffered some pretty heavy losses this Tuesday, with investors apparently not fussed by the impending (if relatively short-term) resolution to the Greek nightmare of the past few months (and years).
With Brent Crude and copper both in the doldrums, the FTSE didn’t really have a hope in hell of surviving the day without any major losses. The UK index slipped back below 6700 as Tuesday continued, with little to no news to distract it from the latest commodity sell-off. Tomorrow, however, could be different. The latest wage growth, claimant count change and unemployment rate figures are released on Wednesday, and will provide plenty to discuss following the Bank of England’s rate hike comments last week.
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