Spreadex Market Update
Sour services splurge sees FTSE and DAX widen their losses, US Markit and ISM figures still to come
A tad lower than expected at 53.7 (still an increase on last month’s 52.7) the UK services PMI, like its manufacturing and construction peers, continued to show the wear and tear of the current Brexit debate, that lacklustre figure leading the UK’s composite PMI to an improved, if still drab, 53.6. Add onto that the continued Iran-inspired spiral Brent Crude finds itself in, the black stuff now threatening to fall below $37 per barrel, and the IMF’s bearish note about emerging markets and the FTSE saw its losses widen to nearly 100 points as the morning continued.
Things were no better in the Eurozone, a putrid set of services PMIs causing the DAX and CAC to drop by around 2.2% apiece. Oddly enough Spain, a perpetual disappointment data-wise, managed the best services figure, hitting a 4 month high of 55.3. It was the Eurozone’s other major nations that let the region down; Italy slipped to a 13 month low of 51.2, whilst Germany was revised down to 55.1. The most worrying downturn was seen in France; having barely recovered from the impact of its own November tragedy the recent terrorist attacks in Belgium have dragged the French services PMI back into contraction territory, the number coming in at 49.9. Add all this together and the region-wide PMI fell back to 53.1, its worst level in over a year.
Still to come are the US Markit (expected unchanged at 51.0) and ISM (forecast to bounce back to 54.1) services PMIs; not that the prospect of improvement is helping the Dow, the futures pointing to a 140 point fall at the open. Beyond the services PMIs the US also sees its trade balance (the deficit expected to widen to $46.3 billion) and JOLTS job openings figures.
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