Spreadex Market Update
Europe joins China with weak manufacturing numbers; US open to bring fresh headache
The weeks-long negative influence from China (which has dominated the markets like the Greek saga on steroids) was exacerbated by Europe’s own disappointing manufacturing figures this morning, with all bar-Germany seeing varying degrees of missed targets. It leaves the DAX, CAC and FTSE all at or around 3 digit declines, with the UK index especially ramping up its losses as investors gradually returned from their bank holiday weekend.
Things could only get worse this afternoon with the US open. The futures are pointing to the Dow starting off the American session around 300 points lower, something sure to bring with it a fresh set of market-wide headaches when the bell rings on Wall Street. The US will then have to endure its own manufacturing data, with analysts forecasting a slight fall in the ISM figure. Following last week’s bumper GDP figure things cold look a bit better; then again, with the state of this morning’s manufacturing data from China and Europe, it might not.
One thing is sure – with the latest FOMC meeting just over 2 weeks away, these figures are now more important than ever as the markets try and gauge whether or not the Fed will indeed go ahead with the long rumoured (and pre-Black Monday near-guaranteed) September rate-hike. Of course the manufacturing numbers are mere foreplay compared to the non-farm main event at the end of the week, but in these choppy times anything that helps investors judge which way Yellen and co. are going to go has the ability to move markets.
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