Spreadex Market Update
Solid CPI prevents Dow from joining in with European rally
Given the surprising hawkishness of last month’s FOMC statement, and the fact the next Fed meeting is now less than a month away, the normally important US inflation figure only gained extra clout this Tuesday. Such a situation explains why, following an as expected 0.2% increase from last month’s 0.2% contract, the Dow was so muted in comparison to its peers, jumping a mere 20 points when those indices in Europe were rocking 3 digit gains. With all this in mind Fed-eyeing investors will be keen to trawl through tomorrow’s FOMC meeting minutes to try and find any firmer guidance about the likelihood of a December hike.
Maintaining a 230 and 120 point increase respectively, the DAX and CAC only benefited this afternoon from the news that Greece has agreed to its creditors’ latest terms, an agreement that will unlock a much needed €12 billion bailout injection if the Greek parliament pass the measures on Thursday.
Despite widening losses for Brent Crude, now below $44 per barrel, and a typically mixed-to-awful afternoon from its migraine-inducing mining stocks, the FTSE held onto a 120(ish) point increase as the day continued, joining its European cousins in a muscular, defence sector-lead rally. It will be interesting to see if such trading can continue tomorrow, with both the UK and the Eurozone having very little to offer investors until, arguably, the end of the week.
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