Spreadex Market Update
European markets pick up
On-going worries about Chinese growth are continuing to weigh on metals prices with Copper, Gold and Silver once again being hit, however we did see a push up after US GDP was revised upwards to 1.7% this afternoon.
The figure, higher than initially thought, has provided a boost but is not so high that one would be able to completely rule out possible quantitative easing from the Fed later this week and any stimulus may push metals and other markets higher.
Until then we would expect there to be a couple more days of thin volumes with few investors wanting to make a move too early.
As well as weakening Chinese demand and uncertainty over the Fed’s meeting at Jackson Hole, Glencore is lower today after going ex-dividend and finding its potential merger fading further and further in to the distance.
Reports indicate that Norges Bank Investment Management, the manager behind Norway’s Sovereign Wealth Fund, has acquired more shares in Xstrata in order to join forces with Qatar holdings and block any potential move at the current offering of 2.8 share ratio on the table at the moment.
It is now looking increasingly likely that the merger will fail to come to fruition, with the stock market currently pricing this in at a ratio of approximately 2.5 Glencore shares per share in Xstrata.
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