Spreadex Market Update
Chinese losses continue to dominate as commodity sell-off widens once again
It’s surprising, given the widening losses for Brent Crude and copper (both of which bested their recent lows), how well the FTSE is holding up so far this Monday. Only down by a handful of points the UK index, by rights, should be far lower than it currently is. Of course, there is still plenty of time for that to happen, and with the day’s losers pile increasingly filled up with oil and mining stocks, all it will take is for Rio Tinto and Shell to join BP in the red for the FTSE to start posting similar losses to last Friday.
The Eurozone’s losses only worsened as the day went on; with little news out of Greece it is likely that the downturn seen by the DAX and CAC is largely based on the macro-pressures of China and the related declines in the commodity markets. Not Greek is now hunky-dory; the country’s banks remain in a precarious state, with June’s figures showing a continuation of the bank-run, capital controls continue their stranglehold on the public, and the key issue going into negotiations, i.e. the much-called for debt relief, appears to be an almost insurmountable obstacle.
So far the US futures have been closer to the FTSE than the DAX in terms of losses; that could change with this afternoon’s figures. If the durable (and core durable) goods orders improve as much as analysts are expecting then the Dow could fall victim to a bullish run from the dollar once again. Monday’s dollar weakness against the European currencies is most likely the reason why the US futures haven’t seen widening declines, but strong figures this afternoon could change all that, especially with a decisive FOMC statement arriving mid-week.
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