Spreadex Market Update
European gains begin to wane as Super Tuesday hangover leaves Dow facing negative open
It is hard to pinpoint exactly why the markets have begun to lose their green glow; the FTSE, for example, has dipped its toes in the red despite a solid performance from its oil and mining stocks, the latter aided by a 3 month high hitting push from copper. A weaker than forecast construction PMI (at 54.2 against the 55.5 expected) likely didn’t help; neither has Brent Crude’s sustained slip this morning. Whilst the commodity remains near the $36.50 per barrel mark it has the capacity to quickly accelerate its losses, something that is a possibility given that the US crude oil inventories are still to come this afternoon.
The Eurozone indices looked similarly deflated as lunchtime approached, both DAX and CAC losing most of their momentum, now up only 15 points each. This even with the ECB’s Benoit Coeure stating that it is ‘vital’ for the central to ‘anchor expectations of nominal growth’, yet another hint that a fresh dose of stimulus is on its way next week.
Perhaps the biggest drag on the European indices this Wednesday is the spectre of a negative open in the US, the Dow futures promising a 30 point fall when Wall Street leaps into action this afternoon. The US indices themselves might be suffering from a Super Tuesday hangover, the fact that Donald Trump has won a further 7 states in the nomination process arguably just as scary as any of the other macro issues currently plaguing the markets. Things may manage to shift back into positive territory before the open, however, with the ADP non-farm figure (forecast at 185k against last month’s 205k) released before the American session gets under.
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