Spreadex Market Update
Dow Jones hits 2 week high as European surge continues despite Iran oil freeze intransigence
The only weakness this afternoon was housing starts, dipping under the expected 1.16 million to come in at 1.10 million. Other than that it was a remarkably consistent day for US data; PPI bounced back from last month’s -0.2% to come in at 0.1%, whilst building permits remained steady at 1.20 million. Even more important was the big jump in industrial production which, at 0.9% (the highest since December 2014), was far better than both last month’s downward revised -0.7% and the forecast 0.3%; this was joined, finally, by the best capacity utilization rate since last November.
These positive results combined to push the Dow Jones nearly 200 points higher as the afternoon went on, the index lifting to its best price since February 5th. Still to come is the latest FOMC meeting minutes; whilst little is expected from the March meeting investors will still be curious to see what state of mind the Fed’s members were in following the awful start to 2016 last month.
Over in Europe there was no sign of Tuesday’s limpness, the FTSE (ever so gently tickling the 6000 mark), DAX and CAC all surging between 2.5-2.8%. Those gains were largely in thanks to the continued rebound from oil, with Brent Crude holding at around the $33 per barrel mark. Interestingly the commodity managed to maintain that price despite negative news from Doha, with Iran rejecting Saudi Arabia and Russia’s request to freeze output at January’s levels; an unsurprising, if still damaging, decision that once again makes somewhat of a mockery of the market’s continued oil optimism.
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