Spreadex Market Update
UK Q4 GDP revised up to 0.6% but 2015 current account deficit at record high
Duking it out for the FTSE’s soul this morning were the fourth quarter’s final GDP and current account readings. The former saw an unexpected upward revision to 0.6%, pushing the country’s 2015 growth to a better than anticipated 2.3%; the latter, however, quickly tempered any excitement arising from that surprise GDP boost, the current account shortfall widening to £32.7 billion for the final quarter of 2015, leaving the year’s figure at an all-time high deficit (well, since they started keeping track back in 1948) of £96.2 billion. Add onto that a worse than forecast drop in net lending to individuals (to £4.9 billion from last month’s £5.4 billion) and there was little reason for the FTSE to change direction, the index sustaining its 40 point fall.
Things were slightly better from a data-perspective over in the Eurozone. Italy joined Germany and France with an improved CPI reading, leaving the region-wide figure to edge up from -0.2% to -0.1%, still stuck in effective deflation thanks to the flailing, failing likes of Spain; the core inflation figure, meanwhile, rose to back to 1%, a level it has been dancing around for the last 9 months. Yet the strength this lent the euro (which rose against both the pound and the dollar) only made matters worse for the region’s indices, the DAX and CAC falling by 60 and 50 points respectively.
Looking ahead to the US open and the Dow Jones seems set for a similarly limp, if less loss-filled, end to March. Despite falling away from Wednesday’s 17800-teasing highs the Dow is still on track for arguably its best month since last October, with only the uninspiring data-pair of the usual Thursday jobless claims (expected at a relatively unchanged 266k) and the latest Chicago PMI (forecast to bounce back from last month’s contraction territory reading) to overcome before March wraps up.
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