Spreadex Market Update
Pound drifts from highs after weak retail sales, but still buoyed by promise of inert ECB meeting
Still down half a percent there are a few reasons why the FTSE has so far struggled this Thursday. Firstly the generally perky performance from the pound which, though it has fallen from its earlier highs, is still up around 0.3-0.5% against both the dollar and the euro. Then there is the morning’s data; while June’s public sector net borrowing deficit was the lowest since 2007 the UK retail sales across the month were far worse than expected, plunging by 0.9% having risen by the same amount in May (news that contributed to the tempering of sterling’s gains). Finally there was the shoddy performance from easyJet; leaping to the top of the losers list the airline slumped by more than 6% as it revealed the post-Brexit impact cost the company around £40 million.
The Eurozone indices were no better this morning. The DAX fell by around 0.2%, with the CAC dropping by 0.5%, both seemingly displeased that the pound lost some of its lustre against the euro. It will be interesting to see how the indices behave around the ECB statement later this afternoon, especially if Draghi provides guidance for the timeline of any potential stimulus.
Looking ahead to the US open and having come off its 7th straight record-setting close the Dow Jones is set to dip around 12 points lower after the bell, though the US index has tended to find most of its recent form after the European session has ended. In terms of data investors are treated to the latest Philly Ged manufacturing index (forecast to creep back up to 5.1 from 4.7 last month), existing home sales and jobless claims readings.
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