Spreadex Market Update
Markets a reddish shade of flat as investors wait for ‘Super Thursday’ to start
As expected UK manufacturing production was countered by a big drop-off in industrial production, meaning the FTSE couldn’t gain any ground as the morning went on. Of course, the index wasn’t helped by the fact Brent Crude still hasn’t firmly re-crossed $50 per barrel, meaning the FTSE’s oil and mining stocks resumed their spiral with BP and Vedanta Resources looking especially sickly. It will be interesting to see the index’s reaction to the wave of Bank of England data at lunchtime; the Dow Jones has largely reacted poorly to any rate hike hinting news in the US, so the FTSE could see its losses widen if Carney and co are much more hawkish than usual.
Talk of rate hikes wouldn’t be complete without a mention of the Fed’s current conundrum; Wednesday afternoon’s data was particularly mixed, with a big miss in ADP non-farm joined by an 11 year high ISM non-manufacturing PMI. Comments, be them from hawk or dove, about the likelihood of September lift-off versus a December start are premature since the big daddy of the jobs data world doesn’t arrive until tomorrow. This afternoon, however, should provide an extra chink of light on the matter, as the US reveals its jobless claims figures, with analysts expecting a slight increase on last week’s 267k.
The Eurozone couldn’t shake its lifeless open as the morning continued, with the DAX and CAC both nearly flat on the day. Once again it fell to the IMF to break the current Greek silence, with the Washington-based institution’s Swedish representative claiming that the international body won’t decide its role in any third bailout until autumn. That would assumedly put its decision after the August 20th ECB repayment/self-imposed Greek deadline, and potentially adds a complicating wrinkle to the ongoing negotiations.
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