Spreadex Market Update
Commodities drag FTSE lower despite shrinking UK trade deficit
Following on from those stellar manufacturing and industrial figures on Wednesday the UK economy received another boost this Thursday, as the goods trade deficit unexpectedly shrank to £10.5 billion, with last month’s figure seeing a similarly promising revision down to £10.6 billion. A £2.2 billion jump in exports was responsible for the shrinkage, providing a conundrum for Chancellor George Osborne, whose glee at this much sought-after improvement will have been tempered by the fact that the last few figures from the UK haven’t exactly fit in with the pre-referendum jitters narrative being pushed by the Remainers. Regardless the news failed to provide much joy for the FTSE, which sank by nearly 1% as its commodity sector began to see a reversal of the week’s chunky gains.
The Eurozone continued to lead the losses this Thursday, the DAX and CAC falling by 1.1% and 0.8% respectively. There wasn’t much to spur on the region’s poor performance this morning, though a rather dour speech from Mario Draghi earlier in the day, the ECB president warning of an ‘ageing crisis’ in the jobs market, gave little reason for the indices to halt their decline.
Having hit 18000 during yesterday’s session the Dow Jones has already slipped away from that landmark level, the futures pointing to a 50 point fall at the open. Data-wise there is little on offer this afternoon beyond the weekly jobless claims, forecast to remain at a steady 269k.
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