Spreadex Market Update
US flash manufacturing PMI underperforms estimates; inflation-hit pound widens losses against dollar and euro
Falling around 50 points at the open, but still not too far away from its post-17600 2016 highs, the Dow Jones quickly joined its European peers in the red this afternoon. Matters weren’t helped by a slightly lower than expected flash manufacturing PMI; coming in at 51.4 the figure was still an improvement on last month’s 51.3, but leaves the US manufacturing sector well within touching distance of contraction territory, and potentially points to continued softness in the country’s Q1 growth.
The FTSE managed to climb away from its earlier half a percent loss as the day went on, instead settling for a far flatter tone of trading. Its commodity sector, as usual, was the main weight on the index, the oil and mining stocks resolutely in the red despite Brent Crude once again pushing past $41 per barrel.
Whilst the FTSE recovered some of its losses things only got worse for the pound, the UK’s disappointing inflation figure, the lingering impact of Ian Duncan Smith’s resignation and the tragedy in Belgium sending sterling over 1% lower against both the dollar and the euro. This week has acted as a sharp reminder for the currency that, despite hitting recent highs last week, there is still a plethora of unpleasant issues for it to deal with in the coming months.
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