Spreadex Market Update
European markets bounce back, but UK commodity and retail sectors still a threat
The FTSE, boosted by a wave of green from its mining stocks, managed to lift away from Monday’s 2 week lows soon after the bell, jumping around 70 points. However, nothing can turn quite as quickly as the commodity sector at the moment, and with Brent Crude losing all of its renewed gusto as Monday continued (the black stuff once again falling below $37 per barrel) the UK index isn’t completely out of the woods yet.
Also threatening the health of the FTSE is its retail sector; Next, normally one of the better performers, is down 3.5% this Tuesday following the announcement of a 0.5% fall in high street sales over the Christmas period, something that doesn’t bode well for the already struggling likes of Marks & Spencer and Debenhams (themselves falling by 1% and 2% respectively).
Whilst yesterday’s UK manufacturing PMI failed to make much of an impact due to the aggressively negative trading atmosphere, today’s construction PMI (expected at 56.1 against 55.3 last month) stands more of a chance to make its mark, though the generally positive push may once again cause a lack of nuance in regards to investors’ reaction to data.
The Eurozone indices were in a similar position to the FTSE this morning, bouncing back from recent lows with 0.7% surges from both the DAX and CAC. Still to come is the German unemployment change figure (hot on the heels of a better than forecast Spanish figure), alongside the region-wide inflation data, expected to have increased to 0.4% from an already upwards-revised 0.2% last month.
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