Spreadex Market Update
Dow Jones avoids European bloodbath, but FTSE and DAX see Brexit-fears intensify
Dropping a mere 0.4% (a fall that does still leave the index under 17700 for the first time since the end of May) the Dow Jones easily outperformed its European peers this Tuesday. The index was undoubtedly helped by a double dose of decent data this afternoon. Though lower than the 1.3% last month the latest retail sales reading nevertheless bested expectations at 0.5%, while import prices hit 1.4%, the best figure since mid-2012.
Even with a solid US open the situation in Europe failed to improve. In a reflection of the nervous uncertainty plaguing the global indices at the moment a report by Reuters suggests that the ECB and the Bank of England are prepared to publically pledge to ‘backstop’ the financial markets in the eventuality of a Brexit. While the move would be intended to ensure market liquidity, the news has been greeted with a grimace this afternoon, increasing panic across the European indices.
The FTSE is now down 1.7%, leaving it just above 5950, while the DAX has fallen nearly 1.5% and the CAC has plunged a wince-worthy 2.3%. If this trend continues all the way until the referendum the markets could be left in a pretty bleak state even before the result is revealed (with yet another poll, this time from TNS, giving the Leave campaign a 7 point lead).
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