Spreadex Market Update
Services data ensures strong Easter-return for European markets
The best services PMI since August 2014, and the chance of better-than-expected 0.7% Q1 GDP growth, joined a spirited performance by the FTSE’s commodity stocks.
A rise in copper, as well as takeover rumours surrounding Glencore and Rio Tinto, pushed the mining sector higher, whilst a drop in Brent Crude couldn’t prevent the FTSE’s temperamental oil stocks from seeing big gains as the morning continued. This reinvigorated trading environment saw the FTSE post a 3 digit upswing; if this trend continues throughout the week the UK index could return to the 7000 level that has receded into the background over the past 10 days.
The strongest Eurozone composite PMI for 11 months, spurred on by a strong showing from the region’s services data, meant that the DAX crossed the 12000 mark after dipping below this landmark level before the Easter break. There has so far been little Greek news to spoil the trading broth this morning, beyond Athens’ latest €279 billion price put on the German war reparation claims Syriza are using as somewhat of a hail Mary as the country’s financial situation grows increasingly dire.
Whilst the European markets are soaring, the US futures are the definition of flat. Despite the dollar falling on the staggeringly low non-farm figure last week, the greenback has returned to take back its losses from the euro and the pound this Tuesday morning with this currency strength likely keeping the US futures down ahead of the open.
With the Fed apparently now looking past June for the rate hike, the US markets should be stronger than they are; yet their recent performance has been incredibly muddled. Poor jobs data is bad for the dollar, which should then be good for the markets; yet there is also the fact that poor jobs is still poor jobs, regardless of the complex dollar-Dow animosity that is currently dictating the US markets’ behaviour. Due to this market inconsistency, it will be interesting to see how the Dow Jones processes the JOLT jobs openings figure later this afternoon.
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