Spreadex Market Update
Big miss in Empire State manufacturing index dominates dull Monday afternoon
From an expected 5 month high of 5.0, the manufacturing figure slumped onto the scene at -14.92, and for bored investors provided reason enough to abandon whatever long positions they were holdings. Analysts, however, are slight more split on how much credence the markets should give this data; whilst it does reflect that the stronger dollar might not be as victim-free as the Fed would like, the Empire State index has been lurching between positives and negatives for most of 2015, meaning it doesn’t necessarily portend any great economic issues for the USA.
However, given the proximity to September, and ergo a potential rate hike lift-off, the markets are extra sensitive to US data at the moment, and combine that admittedly big miss with the lingering fears over China’s next move and a truly staggering dearth of news this Monday, and the Dow’s initial dramatic drop becomes somewhat understandable.
The DAX was the biggest loser this afternoon, with its losses far outweighing those of the CAC or the rest of the Eurozone indices. That is perhaps due, on top of the US data flop, to the political uncertainty ahead of Wednesday’s Bundestag vote. From the originally reported 65 rebels, German paper Bild is now claiming up to 120 CDU/CSU MPs could oppose the third Greek bailout; again, not enough to derail the deal, but something that puts Merkel in an increasingly problematic position.
The current commodity situation, with Brent Crude looking even less likely to break $50 per barrel before the close and copper’s price eroding even further, ensured that the UK index struggled this afternoon. The US data miss merely added to the FTSE’s misery, solidifying its 3 week lows in the process.
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