Spreadex Market Update

FTSE precarious at 7300 as construction growth slows



The European indices still couldn’t get a handle on Q2 this morning, dipping further into the red as the day went on.

While not as much a disappointment as yesterday’s manufacturing PMI, Tuesday’s construction reading nevertheless underperformed analysts’ expectations, falling from 52.5 to 52.2 month-on-month. That’s another piece of evidence to suggest that the UK economy is beginning to falter after the solidity of Q4 2016 and Q1 2017, with the country’s ever increasing inflation one of the major issues. The pound didn’t react too badly to the news, however, seeing its losses shrink against the dollar and the euro, which in turn all but wiped out the FTSE’s early growth, leaving the UK index to perform a precarious balancing act at 7300.

"There is a sense that US investors are waiting for the Trump/Xi meeting in the back half of the week, meaning this afternoon’s trade balance and factory orders figures may struggle to make themselves felt."

The Eurozone indices continued to look lethargic, the DAX still 150 points away from delivering on yesterday’s promise of a fresh all-time high. There was some reassuring data out of the region, with retail sales rebounding to 0.7% from last month’s (upwards revised) 0.1%, though it wasn’t enough to cause any substantial growth for either the indices or the euro.

Looking to the US open and the Dow Jones appears just as sleepy, the futures pointing to a 40-ish point fall after the bell. There is a sense that US investors are waiting for the Trump/Xi meeting in the back half of the week, meaning this afternoon’s trade balance and factory orders figures may struggle to make themselves felt.

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