Muted start to 2015 as manufacturing data disappoints

The New Year got off to a muted start this Friday, as yet more disappointing data from Europe set the tone for the morning.

As the European markets returned after the brief break, there was a unanimous fall on the Eurozone indices after Spanish and Italian manufacturing PMI arrived lower than expected. Combine this with a euro that is struggling against its Asian counterparts and 2015 began much as 2014 ended for the Eurozone: poorly. Even with ECB President Draghi signalling the ever-increasing likelihood of QE at some point this year, the DAX and its colleagues failed to eschew it’s the bearish sentiment that marred their end to last year.

Despite opening slightly stronger this morning, the FTSE began to suffer as those Eurozone figures were revealed, and fear crept in over the UK’s own manufacturing PMI. These worries proved to be accurate, as UK manufacturing fell last month; and despite a rise in net lending to individuals, the FTSE continued to shed points as the morning went on. With unhappy commuters suffering at the hands of increased rail fares, especially smarting after last week’s travel disasters, and the Royal Bank of Scotland’s shares slipping due to a potential US fine, the UK isn’t off to a great 2015.

It was a disappointing end to 2014 for the USA, as the Dow Jones fell at the final hurdle and slipped following weak unemployment claims data, causing the index to be denied an 18000 close to the year. US futures are pointing to a slight rebound this afternoon, however still 100 points away from the records it had set in its pre- and post-Santa rally highs. With the markets not fully re-engaging until next week, the US markets will be looking for the announcement of America’s ISM manufacturing PMI to inspire some bullish sentiment into the markets. The US will be hoping to escape the manufacturing slump that plagued Europe this morning.

Brent Crude oil received some good news just before the year closed when US crude oil inventories fell by 1.8 million barrels to allow the commodity to stall its losses by closing time. This good will initially carried over to this morning, with Brent Crude up to $58.39 per barrel; however, the revelation of an excess supply in Oklahoma, a delivery hub in the US, caused the commodity to once more resume its decline, wiping out the gains made at the end of 2014.