Spreadex Market Update
Eurozone GDP brings tentative gains for markets, UK awaits inflation report
GDP was the name of the game in the Eurozone, providing a brief respite from the suffocating Greek situation that helped inspire Tuesday’s deep declines. The French figure for the first quarter surpassed expectations at 0.6% due to improved household spending; Germany, on the other hand, disappointed with growth at a mere 0.3% compared to the 0.5% due to an import/export imbalance.
Soft data is becoming something of a trend for Germany, normally the leader in any Eurozone data splurge; instead, rather surprisingly, France has grown twice as fast as Germany and the UK in the first 3 months of 2015. Regardless the DAX, alongside the rest of the region’s indices, have enjoyed a healthy, if tentative, start to the morning. Yet given the current nature of the Eurozone, it remains to be seen how long it can avoid a big swing southwards.
Like the Eurozone, the FTSE began to try and recover some of its post-election gains this Wednesday after they were completely wiped out in Tuesday’s sell-off. The UK index has a busy morning, with a flurry of jobs data, including the unemployment rate and wage figures, preceding the first inflation report of this new government. Analysts have warned that the outcome could be negative for the pound with expectations of downward revisions in the UK’s short term GDP and inflation figures. Nevertheless the FTSE is slowly recovering, supported by its commodity stocks as Brent Crude hovers near $68 per barrel and copper trades upwards of $2.93, both of which were aided by improved Chinese industrial production data earlier this morning.
Despite a fall in annual profit, this morning wasn’t all bad for SABMiller as the company beat expectations and saw significant improvements in its African and Latin American sales. Combined, those regions make up 60% of SAB’s earnings and investors were buoyed by the upper single digit growth seen in both. However, these robust figures were dampened by a decline in year-on-year net profits due to the perpetually pesky stronger dollar, and flat figures in worldwide beer volume. These factors took the shine off of SABMiller’s results; nevertheless the world’s largest brewer was up over 1.5% after the bell.
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