Spreadex Market Update
All eyes on the ECB ahead of QE conference this afternoon
After spending much of Wednesday teetering on the edge, the slimmest of gains for the Eurozone indices managed to flourish into a full blown rally as investors look towards Draghi and the ECB. Even negative German factory orders couldn’t derail the positive sentiment that has seeped in this morning ahead of the ECB conference and minimum bid rate reveal. The one worry for the markets will be issues surrounding expectations; the central bank managed to fudge the numbers around the initial announcement, leaking a lower figure than was eventually revealed, ensuring the markets were pleasantly surprised. So far there hasn’t been any similar move this March, so investors may be left wanting if Draghi’s stimulus measures aren’t as far-reaching as hoped.
The FTSE spent much of Wednesday afternoon wandering between the USA’s losses and the Eurozone’s gains, struggling to decide which way to go; the UK index eventually followed its continental peers, reducing its daily losses to just a smidgen below flat. This left the FTSE ready to start Thursday reinvigorated, with the added bonus of its dead weight being ejected. After the FTSE’s quarterly announcement last night, troublesome commodity stocks Tullow Oil and Afren fell out of their respective indices, to be replaced by Hikma Pharmaceuticals and Virgin Money Holdings, among others. This financial exfoliation left the FTSE looking fresh come the bell, with more room for growth if the ECB QE statement goes as planned.
Following a second day of precipitous gains, the US futures saw marginal growth this morning on the potent fumes of the ECB QE statement later today. However, the US will also have plenty of its own news, with unemployment claims and revised non-farm productivity providing yet another indicator of the health of Friday’s government-released non-farm employment change data. After the disappointing ADP non-farm figure caused market-nausea, the US markets will be hoping to avoid a repeat performance of yesterday’s declines, with their best hope being the dual combination of better than expected data and an ECB QE bump.
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