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Stocks stand still after a muted Asian session

Equity markets are mixed this morning as disappointing services figures from China led to a lackluster session overnight. 

Data board
Source: Bloomberg

FTSE 100The private survey of Chinese services showed the sector is growing at a slower rate than expected. This is a concern for China seeing as the services sector is now the largest section of its economy. When you factor in the contraction in the manufacturing sector earlier this week, it points to a further cooling of its economy. Speculation of more easing from Beijing is still doing the rounds and the European Central Bank (ECB)’s meeting this week is also on traders’ minds.

Equity markets are clearly in good shape and pullbacks may see buyers enter the fold. Indices have been pushing higher since 11 February and calling the top, while extra easing whispers are circulating could be risky. Buyers of the FTSE 100 will be keeping an eye on 6212. DAX bulls will be looking towards the 9850 region.

The dollar has taken a breather from its rally which led to GBP/USD moving back to $1.40, but the pair has been losing ground since early February. While it remains below $1.4235 its outlook will be negative. EUR/USD has been in a period of consolidation recently but the bias is to the downside as it has been falling for the past three weeks. If it remains under $1.0962 additional losses are likely. We are one week away from the ECB’s meeting and traders are anticipating additional stimulus. 

Gold is still hanging around the $1240 region and even though volatility has been low it is still in its upward trend that has been in place since the start of the year. The relative strength of gold in the face of an equity market rally is a positive sign. While it holds above $1217 its outlook will be bullish and $1248 and $1253 are the next resistance levels on the horizon.

Despite the massive oversupply in the oil market, the commodity pushed higher overnight. It appears the Saudi plan to force the shale producers out of the market is starting to work as production levels have been cut. The energy market is still eking out gains and WTI bulls will be looking towards $36 and Brent buyers will be keeping an eye on $38. 

FTSE 100 risers and fallers (as of 9.30am) 

Company % change Index points
CRH +4.65 +2.73
Rio Tinto +2.52 +2.42
BP +0.94 +2.34
Glencore +3.62 +2.22
BHP Billiton +2.83 +1.81

 

Company % change Index points
HSBC Holdings -2.52 -9.05
GlaxoSmithKline -1.36 -3.6
Imperial Brands -2.11 -2.98
Persimmon -5.97 -1.52
AstraZeneca

-0.58

-1.15

The day ahead

Economic data:

1.30pm – US jobless claims: jobless claims is anticipated to fall from 274,000 to 272,000.

2.45pm – US services PMI (February): the consensus is for a reading of 49.8, down from 53.2.

3pm – US ISM non-manufacturing (February): the forecast is for non-manufacturing to fall to 53.45 from 53.5

Corporate reporting:

US: Hewlett Packard Enterprise Company

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