Spreadex Market Update
Post-Fed statement blues for European indices
Not only that, but Janet Yellen’s statement on Thursday was seen by many as more dovish than expected, with the chance that the central bank now won’t move until 2016. Though, to be fair, that dovishness is somewhat understandable; despite a week of relative calm China still remains a potential market hurricane, whilst as seen on Wednesday the USA’s inflation still has a way to go to reach the Fed’s 2% target.
Yet interestingly, instead of being the index-boosting news that many a piece of rate-hike delaying data has been treated as in the past few months, the Dow Jones slipped into the red following the announcement, a trend that has extended into this morning’s European open. The main culprit seems to be the fact that, despite supposedly being the most important Fed statement for years, the fog of uncertainty hasn’t lifted from the central bank. Many were expected, if not a rate hike, then at least some kind of firm guidance in regards to when a lift-off would occur. Instead the markets got another wishy-washy report that merely served to remind investors about all of the potential stumbling blocks currently crowding the global economic landscape.
This meant that the European markets opened in various states of dismay this morning; the FTSE fell by around a percent, whilst the DAX and CAC tumbled by around 1.5% as the day got underway. What is worse is that there appears to be little on the horizon this Friday to alleviate investors’ worries; comments from the Bank of England’s chief economist Andy Haldane at lunchtime could provide something of interest for the UK index, but beyond that the markets are going to have to deal with their post-Fed statement blues on their own.
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