Spreadex Market Update
UK Q4 GDP matches estimates but still manages to disappoint
At 0.5% analysts’ forecasts for the first fourth quarter reading were spot on, marking an improvement on Q3’s 0.4%. However, annually the UK’s 2015 growth rate slipped to 2.2% compared to the 2.6% seen in 2014; on top of that, last quarter’s expansion remained overly-reliant on the services sector, something that, despite George Osborne’s promises, has continually failed to be addressed. The rather mixed message sent by the Q4 figure, then, helps to clarify why an air of negativity has begun to creep into the markets this Thursday morning, with the FTSE abandoning its gains to fall into the red by around 10-15 points.
The morning’s negative German import prices figure appears to have primed the region for a tumble into red territory, with the Eurozone quickly embracing the nascent negative tone. The DAX dropped by a dramatic 80 points whilst the CAC was slightly more reserved, falling by around 15 points.
It’s now down to the US open to rescue the markets from more negativity; however the Dow futures have gradually seen their gains shrink as the day has continued and could easily have disappeared by the time the bell rings on Wall Street. A turnaround could occur dependent on the state of this afternoon’s US data; however, with the core durable goods orders forecast at -0.1% against 0.0% last month barely countered by an expected drop in jobless claims, investors may be left wanting.
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