The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Rather unsurprisingly it is PMI data from the eurozone that has left a dampener on equities in early trade.
A comfortable miss in Germany drags the overall eurozone figure towards the water line. Having managed to grow last month, Europe’s engine room narrowly avoided a return to contraction with a reading bang on the 50 line. It won’t have escaped Eurosceptics that despite sentiment indicators telling us otherwise, the composite figure is at its lowest since mid-2013.
The euro has moved modestly lower than this. So far this week it has failed to make a lasting break through the $1.2575 area on three occasions, and the move back towards $1.25 is somewhat of a foregone conclusion.
On the equities front we have an ugly looking mining sector dragging the FTSE lower. Again this is the cause of a breadline PMI number, with China giving us its manufacturing print courtesy of HSBC.
After what might best be described as a ‘dovish-ish’ Federal Open Market Committee minutes release last night, we may have expected more help for equities today, but hawks are getting a little more help in the UK than they are elsewhere.
After yesterday’s Bank of England takeaway that 7-2 is much closer to 4-5 than it is to 9-0, a blowout retail sales figure for October (0.8% versus 0.3% expected) has given us a platform into the Christmas spending spree, and continued numbers like that would certainly give savers a reason to be shouting for a rate rise.
US markets closed a touch lower last night, but close to session highs in what was a relatively benign session. Today we are calling the Dow Jones to open lower by 50 points at 17,635, in line with European declines.