Spreadex Market Update
European indices struggle for momentum following BIS warning despite 3 month high for Brent Crude
Dampening spirits from the off, a warning from the Bank of International Settlements that there is a ‘gathering storm’ of macro-maladies ready to plague the markets did nothing to ensure last week’s rebound continued this Monday. Especially notable is the BIS’ comment that investors are fearful that the world’s central banks are running out of options, something that doesn’t bode well for Thursday’s ECB meeting, which already faces a weighty set of expectations.
Under the dark clouds of the BIS’ ‘gathering storm’ the FTSE started the day fairly flat, a brief flirtation with the green side of the loss/gain divide soon disappearing as the Eurozone fell further into the red, despite the fact that Brent Crude is now above $39 per barrel for the first time since early December last year. Yet even with a verdant commodity sector (the likes of Anglo American nearing fresh 4 month highs as their 2016 recovery continues) the UK index, which has little on the agenda this morning beyond patiently watching the oil price, couldn’t manage to gain any real momentum.
Starting the day similarly stodgily were the Eurozone indices, the DAX and CAC down 0.6% and 0.3% respectively. The former would likely be lower if it weren’t for the morning’s German factory orders figure outperforming expectations (but admittedly remaining far below where they should be), coming in at -0.1% against the -0.4% forecast. With Monday seeing the latest Eurogroup meetings the region’s indices may see some movement based on the dispatches from Brussels; though it is unlikely there will be anything of real market-interest, investors more preoccupied with what Mario Draghi will do later in the week.
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