Spreadex Market Update
Negative UK inflation and weak Eurozone ZEW economic sentiment can’t deter market gains
First and foremost, UK inflation remained at -0.1% for the second month in a row, dealing another blow to those analysts and MPC members who would like to see a Bank of England rate-hike any time soon. Not that this fazed the FTSE; almost doubling its opening gains to an 130 point increase the UK index benefiting from both a rebounding mining sector (one wonders how brief that positive sentiment will be this time) and, sadly, tragedy-inspired gains for the defence sector.
The Eurozone indices were in even better form this Tuesday; coming in at 10.4 against the 6.7 expected and the one year nadir of 1.9 seen last month, this morning’s German ZEW economic sentiment figure helped the DAX rocket to a 240 point rise and, in the process, back near the highs it struck 10 days ago. An unexpected drop in the Eurozone-wide figure, from 30.1 to 28.3, couldn’t deter investors from pouring back into the other stocks in the region as well, with the CAC up 120 points and only 80 away from 5000.
This robust form will be tested as the day continues, however; whilst the Dow future are currently up 85 points, at half a percent that is still lagging the European indices by quite a way, something that may only become exacerbated by a strong, i.e. hawkish, US inflation figure this afternoon. Also to come are the latest US industrial production and capacity utilization rate numbers, both of which could have an impact on the current commodity landscape.
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