Spreadex Market Update
UK inflation dips below zero, but Eurozone QE boost remains dominant market force
Yet with George Osborne rushing to exclaim the positives effects on the public’s pockets this situation will cause, investors failed to react with much fervour. The pound slipped slightly against the dollar, but not by much more than it had already been doing, whilst the FTSE’s gains only marginally contracted. The expectation that inflation would fall below zero, the mixed reaction to what this fall actually means, and the goodwill the FTSE had borrowed from this morning’s ECB QE boost for the Eurozone all helped soften the blow of the weak CPI figure and left the UK index to a solid if unspectacular Tuesday morning.
It looks like Coeure’s QE comments are continuing to have a positive effect on the Eurozone indices, with the DAX maintaining its 200 point gains with the rest of the region similarly rambunctious, the former especially benefiting from the damage the aforementioned comments have done to the euro. This meant that declines in German and region-wide ZEW economic sentiment managed to pass by without causing much of a fuss, leaving the Eurozone in a strong position for the rest of the day.
With a positive, and relatively stable, morning for Europe, the US futures are tentatively making gains ahead of this afternoon’s open after both the Dow Jones and the S&P closed at fresh record highs last night. Buildings permits and housing starts figures are what lie in store for the Dow et al. before the bell, alongside a first quarter fiscal 2016 release from Wal-Mart. What is interesting is that the US futures have remained in the green despite the second day of strong gains for the dollar against both the euro and the pound, something that has been US market kryptonite of late. Yet with the US indices at their latest record levels investors may have put this dollar/Dow dichotomy aside for now.
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