Spreadex Market Update
Strong US open lifts global markets, 2 ostensibly China-free days to come
The index was arguably boosted by misses in all of its key figures this afternoon, including both the ADP non-farm figure and the revised non-farm productivity number. And whilst the former is only ever tangentially linked to the Friday’s government-released non-farm market-favourite, it does suggest that maybe, just maybe, following a string of disappointing data this week, the US isn’t ready for a September rate hike.
Then again, may it is; the current Chinese fog that has only intermittently cleared over the markets has muddied the discussion around the feasibility of a rate-hike, and expanded the issue beyond the previously US-focused metrics. Either way, investors desperate for some kind of direction took this afternoon’s figures in a dovish manner, boosting the Dow Jones in the process.
As expected the US open put a spring the in the step of the FTSE, DAX and CAC, all of whom were lacking energy around lunchtime. The FTSE initially began to hit new sessions highs after the Wall Street bell rang, aided immeasurably by a turnaround in Brent Crude that saw the commodity begin to approach $50 per barrel once again. However, a 4.7 million barrel increase in the US crude oil inventories put a stop to that pretty quickly, taking the edge of the UK index’s growth in the process.
Looking beyond today’s close, how the markets react to 2 days without the presence of China will be interesting. In theory the respite should allow some semblance of calm to return; not the big swings, be they positive of negative, which have dominated trading in the last fortnight, but a more measured reaction. In practice, however, investors’ fears over what happens when China returns next Monday make take precedent, causing a risk-averse tone to creep back in.
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