Spreadex Market Update
Slight improvement in European indices as investors slowly regain confidence
The FTSE, DAX and CAC gradually improved as the morning went on, even if their forays into green couldn’t last due to pre-BoE vote jitters. It helps that copper has resumed its robust rally, with the metal currently nearing a 2 month high; the price surge has helped some of the FTSE’s mining stocks, namely Rio Tinto, Antofagasta and Vedanta Resources, edge into the green and is helping compensate for the slightly shakier position of its oil stocks.
Of course, things could look slightly different at lunchtime if the Bank of England rate vote throws up any surprises. Not that it should; the consensus from analysts seems to be that the central bank has been sufficiently spooked by the violent volatility of the past few weeks and, with the increasingly rusty cogs of the Great Chinese Machine suggesting there could be more tears in the future, Ian McCafferty is likely to remain the lone hawk in a room full of a doves.
The US futures currently look strong enough to wash away most of the morning’s negativity, even if they lost some of their lustre as the BoE vote approached. It is unclear, however, how far Wall Street can carry the rest of the markets this afternoon, especially if the US produces a hawk-boosting jobless claims figure before the open. With the September FOMC meeting only a week away every piece of US data is carrying more market-moving weight than usual; luckily for the Dow jobless claims have been fairly underwhelming for the past 6 weeks, meaning its gains could be protected once the bell rings.
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