Spreadex Market Update
Dire US open and blunt BoE Brexit warning cause global losses to accelerate this Thursday
Beyond the pleasingly dovish, but worryingly bearish, Fed statement last night the Dow Jones had plenty of data to deal with this Thursday. US inflation fell to 0.2% from 0.4% last month, while jobless claims jumped up to 277k, the highest figure since mid-May; on a more positive note the Philly Fed manufacturing index managed to climb back to 4.76, far better than the 1.1 expected, and the best reading for 3 months. Yet the Dow Jones wasn’t in the mood for mildly positive numbers, the index instead plunging 160 points to drop below 17500 for the first time since May 24th.
Combine this negative start to the US session with the blunt warning about the economic consequences of a Brexit from the Bank of England, and the European indices had no reason not to significantly speed up their decline. The FTSE threatened to fall below 5900 with a 1.2% fall, while the DAX and CAC dropped by 1.8% and 1.4% respectively.
Interestingly for all the Brexit-fear currently plaguing the markets, Spreadex has seen a consistent trend of clients opting to put their money behind the Remainers. In both size and frequency of bet choosing to stay in the EU has come out on top, that support continuing throughout the last fortnight despite the deluge of polls having Vote Leave pulling ahead. Of course this is no guarantee that Britain will still be in the EU come Friday 24th June. However, in the run up to the general election last year Spreadex’s clients consistently backed a Conservative majority even as the polls predicted the tightest race in decades, so it isn’t hard to imagine a similar outcome this time around.
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