Spreadex Market Update
Chinese data disappoints, European markets calmer
Chinese growth fell to its slowest pace in 6 years last night, despite matching the 7% GDP forecasts for last quarter. Combine this with a much worse than expected decline in industrial production and a slip in fixed asset investments, and the agonizing slowdown of China’s grand economic machine continues to rumble on. The only upshot of this soft data is that it has caused reports that the Chinese government will increase its infrastructure spending. Given this weakness, especially in industrial production, copper has performed admirably after the bell, holding onto around $2.69-2.70 despite the worrying trends in the metal’s biggest consumer; however, the commodity is also looking susceptible to more declines as the day continues.
As Brent Crude returned to $60 per barrel ahead of the latest US crude oil inventories this afternoon, the FTSE benefited from this latest oil rebound; marginal, if record-grazing, growth for the UK index was propped up by gains for Premier Oil, Tullow Oil and BP. However, they were not alone. A 9% rise in underlying half-year sales for Burberry saw the upmarket clothing company grow by around 2%, whilst a huge 18% rise in pre-tax profit for JD Sport saw it the leader of the pack after the bell as it grew by 4.5% to £5.32. If the FTSE wants to continue its record-nearing rally, then the performances of oil and these earnings-season-stocks will be vital, as the index has little in the way of UK economic data this Wednesday to help boost its coffers.
The Eurozone indices were still relatively lifeless this morning after fears of a Greek-default had drained the region of its vigour at the start of the week. The main event for the region this afternoon will be the latest press conference from the eternal smooth operator Mario Draghi. Pre-ECB QE Draghi’s sweet nothings were a constant boost to the Eurozone markets; the region’s indices could do with some of that market magic, and will be looking for soothing words surrounding the success of the quantitative easing plan alongside calming words over the increasing worrying Greek situation to help drag them out of their slump.
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