Spreadex Market Update
Aggressively negative Asian session leads to larger losses in Europe
With the Nikkei falling 2.4% and the Shanghai Composite plunging another 6.4% (leaving the Chinese index at a 13 month low) the Asian session has already set a sour tone of trading, something that looks likely to continue throughout the day’s European session. There doesn’t appear to be any specific (i.e. new) reason behind this latest fall, beyond, perhaps, the fact that there wasn’t much reason behind the recent rallies seen in Asia either. It appears that, with little good news to keep them going, investors have begun to fret in a more violent fashion once again.
The FTSE is already down nearly 1.5%, no doubt damaged by the fact that Brent Crude has tumbled back below the $30 per barrel mark. And it looks like the commodity’s continued collapse is (as ever) going to define the FTSE’s day, with only a speech from Mark Carney (something that, given it will be the governor explaining the UK’s low inflation and lack of impetus to raise rates, is unlikely to help matters) to distract investors as the morning wears on.
Unsurprisingly the Eurozone was no better this Tuesday, the DAX and CAC looking at 1.5% and 1.8% falls respectively. It seems that Mario Draghi failed to work his magic in Frankfurt yesterday evening; being forced to defend his QE programme without providing any more hints on when the region could expect another injection of stimulus. That has left the region’s indices to suffer under the same aggressively bearish trading as their UK cousin, with no data on the cards to provide even the smallest of diversions.
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