Spreadex Market Update
Rising UK inflation and euro-crisis level ZEW economic sentiment data drive FTSE and DAX lower
Hitting a 20 month high of 0.5% inflation was the main driver of the UK market movement this Tuesday. The FTSE wasn’t too pleased, dropping half a percent to around 6666, though part of that decline came from the miners (with Anglo American and Rio Tinto falling 4% apiece). As for the pound, well, it saw a slight widening of its losses against both the euro and the dollar; versus the former sterling is now trading at €1.192, while against the latter it dipped below $1.32.
Things looked even more strained on the continent. Plunging 1.4% and 1.2% respectively the DAX and CAC both suffered in the face of a disastrous set of ZEW economic sentiment readings. The German figure came in at -6.8, the worst number since November 2013, and lightyears away from the 8.2 forecast; there was a similar situation with the region-wide reading, which dropped to a near 4 year nadir of -14.7 against the 12.3 expected. Unsurprisingly the Brexit was to blame for these awful numbers, leaving sentiment stuck in the same perilous place it was during the euro-crisis.
Turning to the US open and the Dow Jones is set to join its European peers in trickling lower, the futures indicating a 30 point fall after the bell. In terms of data building permits and housing starts are all that is on offer, though investors can expect earnings reports from Microsoft, Johnson & Johnson and Goldman Sachs both pre- and post- the US session.
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