Spreadex Market Update
ADP non-farm miss damages dollar as global indices falter
The largely rate-hike adverse markets initially rode the implications of a low ADP non-farm figure to post-bell rally. However this didn’t last for long, with the general negative sentiment that crept into the markets taking the Dow with it. And for all the talk of dollar strength lately, it is interesting that the greenback can so regularly be run ragged by the pound and the euro, both of which are undergoing highly stressful, and currency damaging, political and economic situations at the moment.
The FTSE couldn’t break out of its election shackles this Wednesday, with investors unwilling to take a risk on the anxiety-ridden UK index. Yet to give the FTSE its due, considering just how uncertain the election results are it is impressive that it is even managing to maintain its current levels. It remains to be seen whether such stoicism can see out the week.
There was good news for GlaxoSmithKline, which announced its first quarter earnings this afternoon, with its reported core pre-tax operating profit of £1.3 billion rising to £9.2 billion when the lucrative £8.6 billion in gains from its deal with Novartis and £366 million reorganisation charges are taken into account. Glaxo set out a steady, confident and importantly realistic outlook in terms of group sales growth and dividend payments for the next few years, resulting in relatively robust gains as the day wore on.
What was looking like a day of mild recovery turned into the latest set of Eurozone declines as the region was harmed by the gains of the euro against the non-farm weakened dollar. Matters weren’t help by the fact that French finance minister Michel Sapin claimed a Greek solution is coming, but not ‘soon’, whilst Eurogroup leader Jeroen Dijsselbloem has (unsurprisingly) stated that there won’t be a deal by Monday. Wage, labour and pension reform appear to be the perpetual sticking point between Greece and its creditors, with European Commission head Juncker and Greek PM Tsipras stating as much in a joint statement after their telephonic chinwag this afternoon.
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