Spreadex Market Update
China cuts reserve ratio requirement
After declining Chinese manufacturing saw the metal decline, this cut has helped copper continue its rally, with it now trading at $259 per pound. However, the regression of Brent Crude back to $56 per barrel from $57 has caused a cloud of bearish sentiment to appear over the markets, with the FTSE struggling, despite the UK’s services PMI beating expectations, as its energy sector begun to slip.
The Eurozone has been mired in negativity this Wednesday, regardless of better-then-expected services PMIs and positive growth in Eurozone-wide retail sales. The retracing by oil has joined a less cheery outlook on the Greek-debt-saga, especially when compared to yesterday’s joyous reaction. Discussions have begun with the IMF over Greek debt-swap, with the potential for discord between the three members of the ‘troika’ whilst Varoufakis stated that his meeting with Draghi and the ECB was ‘fruitful’; the accuracy of this statement will be felt in the days and weeks ahead. And whilst it was all smiles between Tspiras and Juncker in Brussels, there has been a lot of talk and little action in regards to an actual agreement over the debt issue. The more prolonged this Greek-Euro tour is, and the longer the discussion go on, the worse the markets will react as investors lose patience waiting for the outcome of this important debate.
The US ended Tuesday making big gains as oil propelled the markets to a bullish finish. However, ahead of the US open things are looking different, as investors are spooked by the declines that appear to have returned to the commodity. Today sees the ADP non-farm employment change figures ahead of the real-thing on Friday, alongside ISM non-manufacturing PMI; the US markets have struggled with what has been a dismal start to 2015 in terms of American data, and given the way the markets are looking at the moment, will need these figures to beat expectations if they want to edge into the green.
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