Spreadex Market Update
Dismal US services data sparks fresh sell-off this Wednesday afternoon
With the futures initially promising a 100 point jump it looked like the Dow would charge in to save the day this afternoon, especially with a stronger than expected ADP non-farm figure (coming in at 205k against the 192k forecast) seeming to set a positive tone ahead of the bell. However, a pair of dismal services PMIs, with the Markit figure falling to 53.2 (from 54.3) and the ISM number slipping to 53.5 (from 55.1), took the wind out of the US index, leading it to a near 90 point drop not long after the US session began. Suffering even more than the Dow was the dollar; losing around 1% to both the pound and the euro the greenback took a sharp hit following those weak services PMIs.
It shows the power of the current macro-malaise that despite an arguably strong day for UK-related news, including a positive update from GlaxoSmithKline, a decent services PMI and a Brent Crude rebound (lifted by talk of a ‘special’ OPEC meeting this month, in turn caused by comments from Russian foreign minister Sergei Lavrov and Ecuadorean President Rafael Correa) the FTSE remained in the doghouse.
The Eurozone was the source of the worst losses this Wednesday, the region’s worrying services PMIs (hot on the heels of Monday’s manufacturing mess) only intensifying the bearish sentiment that lingered around this morning’s open. That translated to a 1.7%-plus plunge from both the DAX and CAC, France’s decent manufacturing figure quickly forgotten as the negative atmosphere took hold of the markets.
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