Spreadex Market Update
Chinese manufacturing data dampens start to the day
Today should be slightly more lively, good or bad, due to the latest inflation figures coming from the UK; with Osborne stating that 2015’s inflation forecasts have been revised down, it would be surprising if the number didn’t decline. However, given that inflation continues to leave analysts on the fence about whether these current lows are healthy for the country, it will be interesting to see which way the markets turn.
After astonishing 7.4% growth yesterday, copper was forced to give back some of those gains this morning as Chinese manufacturing data fell to an 11 month low. The latest slowdown in Chinese industry also claimed oil as a victim, stalling the growth Brent Crude had begun on Monday. Unsurprisingly, these commodity declines hit the FTSE at open and led to a fairly flat start to the day. After its oil and mining stocks provided some upward thrust yesterday afternoon, the inevitable U-turn occurred after the bell with declines by BP and Rio Tinto representative of their respective sectors.
The fallout from the Merkel/Tsipras meeting only instigated a mild turnaround on the markets, whilst simultaneously inspiring region-wide déjà vu. The news that Greece will provide a fresh reforms package by Monday may seem like a positive step, but its failure to show any real progress is captured in the fact we have been here before. There isn’t much to suggest this latest round of suggested reforms will be enough to unlock the much-needed for Greece; the only difference this time is that the country is becoming further mired in its debts, something that may finally cause genuine compromise from each (or most likely the Greek) side. The Eurozone also had to deal with its own manufacturing data this morning, with the French figure disappointing whilst beating last month’s number; none of this serviced to reverse the significant slump the region found itself in throughout yesterday.
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