Spreadex Market Update
European markets remain in the red following shoddy services data
With the UK services PMI the best of the continent’s major countries, coming in at 55.6 against 55.5 last month, the FTSE should have been lifted away from yesterday’s lows, especially since Brent Crude re-crossed the $33 per barrel mark. However, the UK index remained at the mercy of the market’s current macro-ghosts, slipping around 40 points as the morning continued. At least the pound took the strong services news on board, surging to a three week high against the dollar (though whether cable’s current growth can withstand tomorrow’s presumably dovish ‘Super Thursday’ is another story).
By and large it was a rough morning for the Eurozone’s services sector; whilst France managed to end its contraction, jumping from 50.3 from 49.8 last month, this is still a way away from the growth seen before last year’s Parisian tragedy. Italy and Spain, meanwhile, slipped to 1 and 13 month lows respectively, whilst Germany, which saw an impressive 56.0 in December, fell to a worse than forecast 55.0 in January. All of this helped take the region-wide figure to a 4 month nadir of 53.6, and helped ensure that the DAX (down 90 points) and the CAC (falling around 0.4%) remained in the red.
It is now down to the US open to inspire a turnaround this Wednesday. With the Dow futures looking at a 40 point rise when the bell rings on Wall Street, investors will first, however, have to endure the ADP non-farm figures. Expected at 197k against last month’s 257k, it suggests that Friday’s jobs report is likely to see a dramatic drop from the blockbuster figures revealed in January. After the US session gets underway investors will get a gander at the country’s own services data; the Markit PMI is forecast to fall from 53.7 (from 54.3), whilst the ISM number is expected at 55.1 (against 55.3).
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