Europe has started the final session
of the week on something of a choppy note with buyers remaining sidelined as
more data is awaited. We did seem some further crumbs of comfort in the better
than expected German consumer confidence reading this morning but many will be
left eyeing the UK GDP print as being instrumental certainly in dictating where
the FTSE goes next. There’s also this news of an additional EUR2.1bn levy being
applied to the UK by the EU and the timing here is somewhat awkward – any UK
decision to split from Brussels is seen as being potentially damaging for
economies on both sides, and shocks like this really don’t serve to help the
outlook.
There was another warning bell
sounded with regard to the Chinese economy overnight as property prices in the
country posted their first year-on-year fall. Although the response on indices
in both Shanghai and Hong Kong was relatively muted, this is the latest
worrying signal to come out of the country and the market will now be left
waiting to see if further stimulus measures are on the cards in an attempt to
shore up the situation. The Nikkei was the best regional performer with another
slug of Yen weakness helping here.
The situation on Wall Street is
gradually becoming more bullish as Europe turns positive in early trade, but
even so futures are just pointing to the most modest of rises at the open. We
do have some home sales data due shortly after the bell so this could provide
some further direction, but the main indices have all come a long way this
week, something that could temper the appetite for further gains. Earnings
season continues apace with Ford and UPS – the latter a good barometer of
global business – both reporting before the open but for now we’re calling the
DOW up 12 at 16690 and the S&P unchanged at 1951.
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