Spreadex Market Update

European markets stage slight recovery



The FTSE (+0.43%), DAX (+0.83%) and CAC (+0.68%) are all in the green today as investors seem to be buying the dip.

Total retail sales rose by 2.1% during December compared to last year, but importantly up 4.6% compared to 2019, pre-pandemic.

However, the British Retail Consortium (BRC) have warned that consumer spending could take a hit thanks to rising inflation and surging energy bills.

The World Bank stated today that they expect the global economy to only grow 4.1% this year, down from 5.5% last year, due to the Omicron variant.

But despite this, many UK economists only expect December and January being flat, as the worst-case scenario, due to how well the UK seems to be handling the virus compared to most other countries, especially across Europe.

Inflation seems to be rife across the developed nations, as between the 38 OECD countries, prices rose by 5.8%, a massive leap from the 1.2% a year previous, and in fact counts as a 25-year high.

Many will be keeping a keen eye on the US’s inflation figures released tomorrow, which could have a large sway on the markets.

After a poor open in the US, thanks to the anticipation of Fed chair, Jerome Powell’s testimony, the markets are now on the up, as the S&P is +0.20%.

Although the DOW is still lagging at -0.12%, its heading in the right direction, as traders seem to have taken confidence from Powell’s speech.

Nevertheless, it is difficult to judge straight away how his words will fully impact the markets, as it can take investors a little while to fully digest the implications.

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