Markets flat ahead of European services PMI data

The markets will be hoping to wipe away a quiet, but dour, Tuesday afternoon with a flurry of services PMI this morning.

Reports that UK living standards are back to their pre-crisis level did nothing to help the FTSE recover from the disastrous afternoon it had on Tuesday, with the UK index opening flat after the bell. It is likely to follow this trend until later in the morning, when the UK services PMI for February is revealed. Recently this figure has been inconsistent, sporadically beating estimates but by and large missing targets for much of the past year. However, with last month’s number edging into the green, the FTSE will be hoping for a repeat performance come 9.30.

There were some big movers and shakers this morning. ITV posted big gains following another strong full year release, as CEO Adam Crozier continued to work the magic that started with his appointment in 2010. It was a different story for Afren, as the perpetually fluctuating oil explorer sank by around 40% after it announced it would default on $15 million in interest payments, this news hot on the heels that the stock will likely lose its place in the FTSE250 after the FTSE’s quarterly review.

On the continent, the Eurozone indices suffered a similar fate to the FTSE yesterday, with the DAX especially seeing its biggest losses in over a fortnight. However, all is not lost; the data coming from the region has suggested the Eurozone is in a sustained recovery ahead of the full implementation of quantitative easing. Services PMI might follow this trend, despite a slip in the Spanish figure, whilst the region-wide retail sales should benefit from the astonishing growth Germany saw in this sector on Monday. Ahead of these figures the Eurozone indices remained flat to positive; the issue will be whether region can hold onto any growth it sees this morning after it capitulated yesterday afternoon.

The US indices went the way of their European brethren, failing to escape the bearish smog that had seeped into the markets by closing time. However, the big news of the day will be the ADP non-farm employment change data, an important indicator of Friday’s government released figures. This Friday’s release has gained extra significance as it is the first such figure since Fed Chair Yellen highlighted the key role job growth will play in any interest rate hike decision.