Spreadex Market Update
Groundhog Day for the markets as FTSE and DAX lose gains
Its gains were wiped out by a less than enthusiastic reaction to its construction data alongside the continued decline of Barclays. Whilst the UK’s construction PMI was better than expected, it came with the caveat that the upcoming, and ever-increasing, uncertainty surrounding May’s general election is likely to reduce demand in the next few months. This meant the brief bump the FTSE received after the figure was release couldn’t be sustained in the face of other bearish news.
Investors remain focused on the fallout of Barclays’ forex misbehaviour rather than its profit growth, with extra light being thrown on the issue due to Mark Carney’s testimony in front of the Treasury Committee. Carney was emphatic that the Bank of England has stepped up its ‘market intelligence operations’ since its involvement in the FX-rigging scandal, whilst he faced questions over the depth of Lord Grabiner’s inquiry. These comments are unlikely to have much sway over the markets today; however, they once again point to the approaching storm clouds for the globe’s biggest banks.
The Eurozone indices lost their lustre as the day went on, with PPI for the region falling for a fourth month in a row. This news was joined by a statement from an EU spokesperson, who struck an adamant tone in claiming that no work has begun on a third Greek bailout, contrary to yesterday’s comments from the Spanish economy minister. These issues merely contributed to the bearish atmosphere that crept in as the markets approached lunchtime, with the strong German and Spanish data from this morning swiftly forgotten.
Finally, the US markets will be hoping to resume their record push this Tuesday, even if they are facing a hostile trading environment come opening time this afternoon. After the string of weak data yesterday failed to make its presence felt on the Dow Jones, the lack of significant figures coming from the US will likely pose no issue for the recently resilient US markets.
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