Markets' selloff gathers pace

European equities have shown the sort of unity the eurozone would love to have by selling off in an equally aggressive style. 

Men looking at data
Source: Bloomberg

European airliners selloff

This morning’s stronger-than-expected German consumer climate data is once again showing that optimism within the eurozone business community is improving, even before the benefits of the European Central Bank’s quantitative easing scheme have fully taken effect.

Lagging behind this growing sense of optimism is the underlying economic data that the eurozone is producing, with today’s worse-than-expected money supply figures offering a prime example.

The lack of noise from Greece today is almost deafening as Monday’s deadline for a plan of action to be completed and put into action looks a tough ask. With every passing day since Syriza won the Greek elections there has been a creeping feeling that this could be the straw that finally breaks the eurozone camel’s back.

The horrible events in France have triggered a selloff in European airlines as this tragedy will leave many questioning what they will do for their summer vacations. easyJet has announced that it has managed, for the first time ever, to turn a profit in the winter half of the year, but even this good news has failed to see the company climb out of the red.

The London Stock Exchange has also sold off as the markets have been informed that Borse Dubai, a subsidiary of the Dubai wealth fund, has sold its 17.4% stake in the company.

Hikma pharmaceuticals is still finding its feet in the FTSE 100, and heading into the close it is the only stock up on the day.

US exporters wary of dollar strength

This week has shown that the pace of the US recovery is better than that of the eurozone and UK, but maybe not quite as convincing as it has been in previous quarters. There is an increasing suspicion that the strength of the dollar will be more directly felt and highlighted during the next US reporting season.

Businesses with sizeable export networks will start to feel the pain as the strength of the dollar makes US goods more and more expensive in comparison to other economic regions.

SanDisk shares have collapsed today as the company slashed its first-quarter and 2015 expectations. This triggered an almost 18% fall in the company’s shares, and considering this is now the third consecutive time the company has returned to the market to downgrade expectations, this is maybe no real surprise.

Gold above $1200

Gold has obviously enjoyed being out of the spotlight as it has taken this opportunity to quietly jump back above $1200 even after hitting $1220 earlier in the day. As encouraging as this move might be it will have done little to convince the longer-term sceptics that the precious metal is back in favour. 

Saudi military intervention crossing over its border with Yemen had seen oil markets press the panic button in early trading. After seeing Brent and US light up by 5% in early trading a calmer attitude has been struck as the day has progressed, as more than half of this move has now been given back.  

Cable heads towards $1.50

Once again intraday trading has seen currency traders squeeze GBP/USD up towards the $1.5000 level, but without the conviction required to see this psychological level broken.

EUR/USD has also seen renewed enthusiasm from currency traders, as it has half-heartedly tried to convince sceptics that this is anything more than a decent bounce in an otherwise bearish trajectory.

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