European equity markets have started 2018 off on the wrong foot. The FTSE 100 is being weighed down by the mining sector, even though China revealed respectable manufacturing figures last night.
The Caixin survey of Chinese manufacturing rose to 51.5 in December, up from 50.8 in November. Traders were expecting a reading of 50.7, but the stronger than expected report failed to boost mining stocks which are firmly in the red this morning.
The DAX and the CAC 40 are in the red as the strength of the euro is holding back the eurozone indices.
Shares in BP are down 0.5% after the company stated it’s expects to take a hit of $1.5 billion due to the changes in US tax changes. The oil titan also stated it would benefit from the new tax regime in the long-run. BP’s share price has been pushing higher since August and the recent surge in the oil market has assisted it too.
The GBP/USD is being helped along by the weakness in the greenback. The US dollar has been sliding since mid-December as traders are wondering how much of an impact the new US tax reforms will have on the economy. The pound hit its highest level against the US dollar since September this morning.
EUR/USD hit its highest level in over three months thanks to the decline in the US dollar. The latest manufacturing figures from eurozone countries were mixed was the reports from Spain, Italy and France missed estimates while, the Germany report came in line with expectations.
At 2.45pm (UK time) the US will announce the manufacturing PMI figures for December, and dealers are expecting the reading to remain at 55.
We are expecting the Dow Jones to open up 76 points at 24,795, and we are calling the S&P 500 up 4 points at 2677.
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