It’s been a rather volatile start for trade across Europe with the initial reaction having been one of taking the lead from last night’s disappointing finish on Wall Street, but some broadly better than expected German and Eurozone PMI data has given equity markets something to cheer. It wasn’t universally positive, but all the key readings are now above the break even 50 point, giving traders a degree of assurance that perhaps the wheels aren’t about to fall off – at least not just yet, anyway. The decision has also been taken to overlook the rather disappointing PMI numbers we’ve seen come out of France this morning, although the weakness here has arguably been priced in already.
It’s been a rather muted session in Asia too, with equity markets taking direction from Wall Street and failing to find any meaningful lift off the back of the better than expected Chinese manufacturing PMI print. However with these threads of hope coming through in the European economic data, it can be no surprise that the Nikkei has jumped markedly in after hours trade and assuming we can maintain this degree of optimism, we’re going to be looking at a positive start to Friday’s session.
That Eurozone PMI data is also helping boost US futures prices, with the S&P having rallied up from around 1,930 shortly after European trade commenced. Again we have more earnings news on the cards whilst the US manufacturing PMI data will also be closely followed – momentum has been building here so any shortfall could serve to knock equities back shortly after the open. Yesterday’s shooting in Canada is a stark reminder of the rather fraught geopolitical situation we’re facing right now and was responsible for pushing markets significantly lower yesterday, but if this remains an isolated event and the macroeconomic factors continue to deliver then there’s perhaps some hope that the sell off could be at an end. Ahead of the open we’re calling the DOW up 134 at 16595 and the S&P up 16 at 1943.