Spreadex Market Update
Latest commodity drop-off drags FTSE into the red
With Chinese shares seeing their worst month in 6 years, it’s hardly surprising that investors aren’t keen to hold onto their commodity shares going into August. This caused the FTSE’s heavy-hitting oil and mining stocks like BP and Rio Tinto to give back whatever mild recovery they had seen in the middle of the week, leaving the UK index to tip into the red following two days of stellar growth.
The DAX and CAC managed to hold onto their gains, if only just, as Friday went on, with an as expected inflation figure and a better-than-expected core CPI number joined by a disappointing increase in the region-wide unemployment rate. That’s the first increase in Eurozone unemployment in 2015, one that was prompted by the staggering jump in Italy’s youth unemployment rate, which now sits at an all-time high of 44.2%. In terms of the IMF’s debt relief comments there has been surprisingly little public reaction from the Eurozone’s key figures; perhaps they are scrambling behind the scenes to keep third bailout negotiations on track.
The commodity situation, and subsequent gains for the dollar, has left the US futures pretty flat at the end of this rate-hike-talk heavy week. This afternoon brings with it the latest Chicago PMI and the revised UoM consumer sentiment figure, the latter likely to reflect the big miss in CB consumer confidence from Monday. Neither number is integral to the Fed’s rate-hike decision, but provides yet another sign of the economic health of the US economy as investors and analysts alike eye a September lift-off.
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