Spreadex Market Update
UK annual GDP reading revised lower as business investment falls for first time in 3 years
Despite the FTSE dancing around the 6270 mark it was not a great morning for UK data. Although unchanged at 0.4% for the first quarter of 2016, the country’s GDP was revised from 2.1% to 2.0% at the annualised rate, showing a softness that seems set to seep into Q2. Not only that, business investment declined by 0.5%, the first time it has fallen in 3 years, with many blaming pre-referendum nerves for the drop. Elsewhere the Q1 figures continued to make a mockery of George Osborne’s ‘march of the makers’, the services sector propping up the UK economy with 0.6% rise compared to the 1% and 0.4% contractions seen in the construction and manufacturing sectors respectively.
Things were a bit brighter over the in the Eurozone, with the DAX crossing 10250 for the first time since the end of April while the CAC lifted back above 4450. There was little to cause that growth this Thursday, the region likely still benefiting from yesterday’s Greek excitement.
The Dow Jones looks set to have more in common with the FTSE than the Eurozone this Thursday, the futures pointing to a muted 15 point rise at the open. Before all that, however, investors will get a glimpse at the latest durable goods orders, which are expected to slip to 0.3% from 0.8% (but with the core figure rising to 0.3% from -0.2%).
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