Spreadex Market Update
Global indices say ‘Brexit-schmexit’ to post muscular gains, but painful Monday continues for pound
The Dow Jones quickly joined in with the rebound bacchanal, jumping over 200 points to reach its highest price since the first week of January. Yet like its Eurozone peers the Dow had to turn a blind eye to some dodgy data to ensure the gains remained. The US flash manufacturing PMI came in at 51.0, a decent whack below the 52.3 forecast; that drop takes the figure to its lowest point since October 2012, and suggests contraction (already seen in the ISM PMIs) could soon be on its way.
The FTSE only increased its growth as Monday continued, shaking off (or barely acknowledging) the Boris Johnson-heightened Brexit fears currently plaguing the pound to reach a 3 week peak. It helped that Brent Crude has bounced back in style, surging over 5% to rapidly approach the $35 per barrel mark; add onto that copper’s own 3 week high hitting form and the UK commodity sector looked in (relatively) robust health, KAZ Minerals leading the charge with a near 17% surge. Sterling, on the other hand, only looked more battered and bruised as the day went on, plunging to a fresh 7 year low as investors fled the currency in droves; frustratingly for the pound this is likely only the first step in what could be an incredibly ugly 4 months in the run up to the referendum.
Setting the tone for the day’s trading from very beginning the DAX and CAC saw little change as the afternoon chugged along, both settling at 2% gains despite the morning’s almost uniformly disappointing manufacturing and services PMIs.
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