Spreadex Market Update
Europe ignores dismal data to post mild growth; US Markit and ISM services PMIs expected to see sector in contraction territory
The most egregious growth argubaly came from the FTSE; rising around 20 points (after having opened the same amount in the red) the index ignored the worst UK services PMI for nearly 3 years, the figure seeing a sharp drop to 52.7 from the 55.1 expected. The reason for such a fall seems to be businesses’ increasing fears over a potential Brexit, something that doesn’t bode well for the coming months when the in/out debate is only going to increase in noise and hostility. Yet the FTSE ploughed ahead with its mild gains regardless, its commodity sector seemingly responsible for the gains with Brent Crude now nearing $37 per barrel.
Whilst not quite as bad as the UK’s near 3 year nadir the Eurozone saw its own unpleasant package of PMIs this Thursday. The worst of the bunch came from France, an already worrisome 49.8 revised to a 13 month low of 49.2 as the country’s services sector continues to suffer in the aftermath of last November’s tragic terrorist attack; Spain, meanwhile, hit a 14 month low whilst Italy and Germany saw their weakest figures in 5 months, despite all 3 countries beating expectations. This sickly group of services PMIs left the region-wide number at its worst rate in just over a year, matching Tuesday’s manufacturing disappointment. Yet, like the FTSE, the DAX and CAC managed to eke out some slight growth, rising around 0.1% as lunchtime approached.
It is now down to the Dow Jones to turn those meagre gains into substantial growth, even if the index itself is only promising a 15 point jump at the open. First, however, comes the jobless claims and revised non-farm productivity figures (both expected to worsen), before the US Markit and ISM services PMIs (both forecast at a troubling 49.8) are released later in the afternoon.
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