Spreadex Market Update
Chinese deflation fears spark more European losses this Wednesday
A remarkable 43rd consecutive month of producer price index decline in China, with last month’s 6 year -5.9% low matched by today’s release, was joined by a worrying 0.4% drop in inflation to 1.6%. Combine this with yesterday’s commodity-wobbling 20% decline in imports, and, after a fortnight’s respite, the markets are seeing a mini-revival of the Chinese-data inspired losses that came to define August and September.
This left the FTSE 50 points lower, and teetering on the edge of 6300, as its commodity stocks continued the tumble that began on Monday; compared to its Eurozone cousins, however, the UK index might receive a helping hand later on this morning. If analysts are correct, an increase in wage growth to 3.1% from 2.9% last month, a 2.3k fall in jobless claims and the maintenance of a 5.5% unemployment rate could all aid the FTSE in mitigating its China-inspired losses as the day continues.
The DAX, damaged by its woeful ZEW economic sentiment figure yesterday and further troubled by today’s deflation fears from China, plunged another 100 points this morning, taking it below the 10000 mark it had worked so hard to earn back last week. The CAC, meanwhile, is back to where it was last Monday, dipping 40 points to nudge below 4600.
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