Spreadex Market Update
OPEC ineffectiveness drags down Brent Crude, ECB provides DAX little to chew on
The cause of that dissipating momentum can in part be laid at the feet of the Dow Jones, which plunged 65-70 points after the bell. It seems that a solid ADP non-farm employment change number, complete with upward revision to last month’s reading, has spooked the more rate hike adverse investors out there, especially with the all-important government-released jobs report set to arrive tomorrow afternoon.
It was an uneventful ECB meeting, with Draghi hitting the usual checkmarks of reaffirming that the central bank will use all of the tools at its disposal, claiming that March’s QE has ‘made a lot of difference’ while stating that on Greece still has a few ‘prior actions’ implement before Greek bonds are reinstating into the ECB’s various purchase programmes. An added bonus was a Brexit-check in, Draghi echoing the likes of the IMF and OECD by arguing that Britain leaving the EU would have is a risk to the global economy. In something approaching actual news the ECB revised the Eurozone’s 2016 inflation forecast to 0.2% from 0.1%, while raising its 2016 growth expectations to 1.6% from 1.4%. None of this proved to be much use to the Eurozone indices, with the DAX and CAC flirting with flatness as Thursday wore on.
A 1.5% plunge from Brent Crude, in light of more OPEC ineffectiveness, helped bath the UK commodity sector in red this afternoon, reducing the FTSE’s previous half a percent gains to almost nothing in the process. That means the UK index looks like it is set to close below 6200 having lost around 100 points since the week began.
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