Spreadex Market Update
Brent Crude toying with 6 month lows, continues to sap energy from FTSE
There was to be no resting period for the commodity sector, as its nightmare July immediately turned into a similarly headachey start to August. As usual, the FTSE was the main index victim of this latest commodities sell-off, slipping into the red, if not dramatically so, as the day went on.
After being on a Greek leash for a few months, it looks like the FTSE is now in thrall to the most recent wave of negative trading that has blighted the oil and mining stocks since China’s market instability began to ramp up. If the commodities remain in this deep shade of red it is likely that the construction and services PMIs, on Tuesday and Wednesday respectively, will struggle to be heard, regardless of quality.
The Eurozone couldn’t have looked much more different than the FTSE this Monday, with the DAX posting 3 digit growth whilst the CAC looked similarly healthy. Escaping the downward drag of the commodity sector, the region’s solid manufacturing figures appear to have inspired some optimism in investors, helping carry the Eurozone indices to some meaty gains as August’s trading got underway.
The US markets were more FTSE than Eurozone, with an afternoon of mixed data leaving both the Dow and the dollar limp. The core PCE price index and personal spending figures were both as expected, even if the latter did see a downward revision for the previous month; the ISM manufacturing PMI, however, was lower than forecast, and contained a Fed-irritating (well, at least for hawkish members of the central bank) slip in its employment component. Whilst this slide shouldn’t signal a particularly weak non-farm number, it is looking like the headline jobs figure will be at the lower end of the 200,000s. The spectre of such a figure, however, was still enough to haunt the rate-hike fearing US indices this Monday afternoon.
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