Spreadex Market Update
US open fails to change atmosphere of markets as losses widen
What was meant to be a strong afternoon for US data turned into any but, with only the NAHB housing market index figure exceeding expectations. And whilst that number was the highest since September last year, it couldn’t mask big misses for Empire State manufacturing, industrial production and the capacity utilization rate, slightly tempering the hawkish comments that have been building since the most recent non-farm figure. Perhaps because of the already suffocating smog wafting over from Greece, bad news was treated as exactly that, bad news, this afternoon. There was no immediate dollar/rate hike debate complication; the Dow Jones simply widened its already notable losses whilst the greenback followed suit.
A speech from Mario Draghi, once such a market boosting event, failed to ignite much hope in the Eurozone this afternoon, with the ECB President merely reiterating much of what has been said before in regards Greece. Stating that the region needs a ‘strong deal’, Draghi failed to clarify how much progress has been made on such a solution, likely because there hasn’t been any, whilst also refusing to speculate on the consequences of any potential Greek ECB repayment failures. The DAX has now effectively lost all of the ground it had made back across last Wednesday and Thursday, and looks like it could return to the 4 month lows it saw last Tuesday, especially with what is looking like it will be another damp squib of a Eurogroup meeting on the 18th.
With no real change in the Eurozone, or indeed in its commodity stocks, the FTSE slipped to fresh 3 months lows, worse than those seen last week, as investors saw no reason to rescue the UK index from its current slide. Tomorrow could, in theory, see a change in the index’s fortunes, or at least movement based on non-Greece reasons, dependant on the performance of the UK’s latest inflation figure.
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