Spreadex Market Update
Sparse Wednesday diary leads to stagnation
Despite the latest German Ifo business climate data beating expectations, this good news couldn’t inspire much growth in the DAX, or the rest of the Eurozone, with the region appearing to be hampered by the euro taking back some of yesterday’s losses against the dollar alongside more worries about Greece’s financial situation.
Flatness was the name of the FTSE’s morning game, with the UK index doing no more than holding onto its 7000 level, even with mortgage approvals hitting a 5 month high. The FTSE was the latest victim of the market sleepiness that has hit both the Eurozone and the US futures, and with little on the horizon until Thursday it is hard to see what will spark some life in the global indices. Instead of losing its mild morning gains, Balfour Beatty showed some impressive resilience with investors clearly pleased by the intentions of new Group Chief Executive Leo Quinn, despite the depressing nature of its figures.
The US markets succumbed to the strength of their own currency on Tuesday night, with a stellar day for US economic data merely buttressing the dollar rather than boosting the Dow. However, with the greenback giving some of its gains back this morning, there is hope for the US markets can change this week’s downward spiral if core durable goods orders can overturn the recent dismal run it has been on.
Whilst Brent Crude continues to hover around $55 per barrel, it may struggle this afternoon as the latest US crude oil inventories figure looms. The inventory data for much of the past two months has been staggeringly high, routinely exceeding expectations by around 5 million barrels, if not more. This means that today’s forecast of 5 million may be too conservative and oil might have to endure another huge figure. This, on top of the news that US oil storage may reach capacity very soon, means there are more nasty clouds appearing on the commodity’s horizon.
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