Asia Pacific investors are caught in a cross current. Data released overnight disappointed in Europe but beat expectation in the US. Continental exchanges dropped, while US indices finished in the green, aided by FOMC minutes that were widely read as dovish. The numbers drove a further decline in EUR/USD.
French and German PMIs missed on almost every count. These forward looking indicators remain in expansion territory, albeit at a slower rate than investors expected. A miss on UK inflation data further coloured the lower growth scenario. The Euro Stoxx 50 index dropped 1.27% in response. The reads raised fears tonight’s German GDP and UK retail sales could also disappoint.
In contrast US services and manufacturing expanded at better than forecast levels. After opening weakness the news saw initial declines contained. Minutes of the most recent Fed Open Market Committee meeting provided a catalyst for a late rally.
Industrial commodities came under pressure. Oil prices slipped as US inventories jumped, and copper also fell. Asia Pacific futures are pointing to a negative day. A lack of regional data today may see share markets tread water. Weakness in both the US dollar and Euro could see strengthening local currencies add to the weight on shares.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.