Spreadex Market Update
European indices continue to recover, latest US Q2 GDP estimate this afternoon
Whilst the Shanghai Composite’s late surge always looked dubious, its doubtful many predicted the true reason behind the sudden swing upwards. Well, partially at least; reports suggest that the increase was caused by stated-directed investors pouring in to buy up stock (much like they have done in the past) to ensure a positive picture for the index come closing time. That much is unsurprising; why they did it, however, is a bit odder. Bloomberg claims that sources close to the situation have stated the Chinese government wants the indices to rally, not because it would help calm the global markets and ease the pressure inside the country, but because they don’t want anything distracting from next Thursday’s World War II victory over Japan parade.
Regardless, the European indices have used the momentum from the Asian session to post some muscular gains, with the DAX especially nearly negating the losses it has incurred this week. Of course the FTSE is being pushed on by its rebounding oil and mining stocks, with Rio Tinto, BP and Shell all posting impressive growth.
Currently it looks like the US open will continue the party, with the Dow futures pointing to another 200 point increase; however, the American markets will have to navigate the latest estimate of the US second quarter GDP this afternoon. Analysts are expecting a marked increase from the reading given at the end of July, up from 2.3% to 3.2% in its annualised form. And with New York Fed chair William Dudley suggesting a September lift-off looks doubtful, the US indices might be able to enjoy a bit of positive data without having to fear the effects it will have on the date of an impending rate-hike.
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