Spreadex Market Update
Post-BoJ interest rate cut surge (just about) continues, but US Q4 GDP looms
The Eurozone was the busiest region this Friday; with the DAX and CAC both up around 0.7-0.9%, it appears that the day’s Eurozone-wide inflation figure (coming in at an as-expected 0.4%, but with an improvement in the core number) has allowed the morning’s gains to continue. Be that because the figure is sufficient enough to satisfy investors, or because it is low enough to suggest Mario Draghi will be forced into deploying his ECB QE trump card as early as March, is unclear. Either way the Eurozone indices have shown no signs of abandoning their last-gasp growth just yet.
With Brent Crude creeping towards $35 per barrel the FTSE was similarly steady in its gains this Friday, jumping around 65-70 points as the day continued. It helps that the majority (barring BHP Billiton and Antofagasta) of the UK index’s commodity stocks are in the green, joined by a 2.3% rise for Sky, which reported record first half operating profits of £747 million this morning.
However, despite the Dow futures suggesting a 100 point climb at the open, there is enough US data to upset the applecart if this afternoon’s figures underperform. The main focus will be on the country’s Q4 GDP growth; even if the figure matches the expected annualised rate of 0.8, that is a dramatic decline compared to the 2% seen in Q3, and may still disappoint investors. Beyond the GDP data the US sees the latest goods trade balance (the deficit expected to shrink by half a billion), the Chicago PMI (forecast at 45.4 against 42.9 last month) and the revised UoM consumer sentiment number (expected to fall to 93.1 from 93.3).
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