Unexpected drop in Spanish manufacturing

In mid-morning trading the FTSE 100 is down 40 points as a sharp drop in Spanish manufacturing has spooked the market.

Equity markets have had a slow start to the week, with an unexpectedly soft Spanish manufacturing number reminding traders that the country's problems are far from over. Despite Chinese manufacturing increasing in November, there are still doubts over future growth rates as credit conditions continue to deteriorate. The booming Asian economy is heavily reliant on credit and if the pool starts to run dry we could see a collapse in mining stocks. 

The retail sector is in the red despite it being Cyber Monday, the day when online shopping spikes as the countdown to Christmas begins. 

London equities are offside even though manufacturing levels in the UK are near a three-year high. This highlights how international the FTSE 100 is.

In the US we are expecting the Dow Jones to open unchanged at 16,086, as traders sit on their hands ahead of Ben Bernanke’s speech at lunchtime. 

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