Spreadex Market Update
Red return as mixed data causes losses to widen
Sadly for the Eurozone, despite German unemployment rates hitting a fresh all time low, not all of its countries are Germany and the fact that region-wide unemployment grew to 11.3% whilst core inflation fell outweighed the positive growth in overall inflation to cause Tuesday’s losses to widen. This mixed news, against the already volatile backdrop of Greek stagnation, provided a cocktail of negativity that was not only felt on the Eurozone indices, but on the euro as well. The region’s currency increased its losses against the dollar whilst the pound opened up a fresh wound on its European peer.
As often been the case of late, if things are bad in the Eurozone then things are worse for the FTSE. Even though its final GDP for the fourth quarter of 2014 was revised up to 0.6%, the fact that the UK’s current account deficit reached an all-time high dragged the FTSE to nearly 1% in losses as lunchtime approached. On top of this came the usual woes of falling oil; with Brent Crude sliding to below $55 per barrel, BP, Royal Dutch Shell and Premier Oil all settled into declines. Similarly, copper and gold’s latest contraction has played havoc with the FTSE’s mining stocks, as Vedanta and Anglo American fell among the morning’s losers.
After tickling 18000 last night, the Dow Jones quickly fell away from its landmark level as the stimulus hopes in China could only take it so far. Dollar strength, and the bearish situation in Europe, looks like it has spooked investors once more, so the US markets will be looking to this afternoon’s data to inspire a turnaround. Chicago PMI was a big disappointment last month, yet if the figure can hit this month’s forecasts then it could provide a much needed market boost. Similarly, it will be interesting to see the state of the USA’s CB consumer confidence; following the announcement that personal spending had fallen below expectations there is a chance this decline will be reflected in this afternoon’s figure.
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