Spreadex Market Update
Strong Eurozone data drags markets higher
Whilst reports from Germany paint a tense scene with divisions arising over the Greek bailout vote to be held tomorrow, including Schauble being Schauble and stoking the fires of Greece’s ‘untrustworthiness’, the economic data from the Eurozone was enough to push the markets into the green. The region’s M3 money figures, private loans and economic sentiment data all beat expectations, whilst its consumer confidence reached a 7 year high. Even more impressively, a 20k reduction in jobless claims saw German unemployment reached a record low rate of 6.5%, spurring the DAX on to new highs as the day went on.
There was similar positivity for the FTSE. UK GDP came in as expected, but with the ominous caveat that British business investment has declined at its fastest rate in 6 years, further highlighting fears that the UK’s economic recovery is too skewed towards consumer spending. However, this warning wasn’t felt by the UK index, as it continued to climb back towards its recent highs off the back of strong gains by some of its key stocks. Despite missing expectations KAZ Minerals claims it is on target for its macro-aims, and with copper pushing $2.70 per pound, both Vedanta Resources and Antofagasta, alongside KAZ, have spent the morning basking in the glow of the metal’s latest rally. And with Brent Crude stabilising (for now) at $61 per barrel, the FTSE’s oil stocks recovered the minor losses they suffered after the bell.
However, it wasn’t all good news. The announcement that it will continue to cut a ‘substantial’ amount of jobs in its restructuring process, despite paying £421 million in bonuses over 2014, saw investors turn on the Royal Bank of Scotland, with the stock sinking to a 4% loss. RBS’ woes were joined by a backlash against Capita, which saw this morning’s early growth wiped out by lunchtime, alongside continued losses for Easyjet and Reed Elsevier, meaning the FTSE couldn’t fully capitalise on the robust performance of its mining and oil sectors.
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