Spreadex Market Update
Tuesday brings with it UK inflation and Eurozone economic sentiment figures, but China looms large
The biggest release, of this morning at least, is the UK’s inflation data; the number is widely expected to fall back to zero from its mild 0.1% increase last month, with core CPI slipping further from 1.2% to 1%. Another figure flirting with deflation would pose an interesting question for the Bank of England, which is slowly grappling with the issues that have plagued the Fed since the New Year. There appears be a least a few nascent hawks in the BoE, hawks that have been thwarted by a macro-economic landscape that keeps knocking potential rate rises off course. Another low inflation figure would merely add to the difficulties the likes of McCafferty, Weale, Forbes and, arguably, Carney are facing to convince the MPC that rates should rise soon.
The Eurozone then sees the German and region-wide ZEW economic sentiment figures, both of which are expected to see a sharp drop off from the numbers posted last month, assumedly due to the investor-wearying chaos seen in August.
Yet these figures are going to have to fight with China for investors’ attention; the Shanghai Composite has seen its worst 2 days since the peak of the August sell-off around 3 weeks ago, news that weighed on the European indices at the open. The FTSE, DAX and CAC all displayed mild losses as the day began, with investors still jittery over, not only China and the morning’s data, but the impending FOMC meeting and Greek election also. In the case of the latter, last night’s debate between Syriza’s Tsipras and New Democary’s Meimarakis did nothing to separate the two parties in the polls, with both still on roughly 25% with around 40% of the country undecided.
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