Spreadex Market Update
Frantic scenes as losses widen across the globe
Despite inflation coming in on target at -0.1%, an improvement on last month’s figure, the Eurozone indices were in freefall this morning, as the DAX sank by over 200 points to well below 12000. The news from China and the continued Bloomberg issues added to the already perilous situation in Greece to create an unfriendly trading environment at the end of the week.
There was mixed news for the UK jobs sector this morning. Unemployment fell to the lowest point since July 2008; however, wage growth, something already pointed to as being weaker than it should, slipped from last month’s figure to 1.7%. This provided plenty for both major parties to chew on and spit back out, ideally at each other, with the Tories lauding their jobs-creation record whilst Labour admonished the government’s dismal record on actual earnings growth. Regardless of the partisan reaction to the jobs data, the pound responded well to the news, and is on track for its best week since the start of February as it hit 4 week highs against the dollar.
The dollar should dominate US discussion yet again this afternoon once the latest USA inflation data is released. The inflation figure should prove to be a tricky obstacle for the markets; do investors want to see growth in the figure, or stagnation? It depends on whether they are dove or hawk, the former needing a weak figure whilst the latter will be clamouring for some improvement. The divergent opinions on this debate were highlighted last night, with Richard Fischer maintaining that the Fed will raise rates this year; whilst Dennis Lockhart claimed that the current ‘murky economic picture’ has made the timing of the rate hike unclear.
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