Europe
Shares in Europe were being weighed down by a slowdown in manufacturing growth across the region and in China while the ECB’s asset purchase program got off to a slow start as energy shares had a volatile session with oil prices see-sawing in and out of the red.
The German PMI indicates contraction in Germany at 49.5, this has pulled the Euro-area survey down to 50.1- very near contraction. Spain beat expectations moving further into expansion while France beat but remains well in contraction territory.
Germany is supposed to be Europe’s growth engine so if it is going backwards then the chance of the more troubled French and Italian economies turning around is greatly reduced.
The ECB purchased €0.4bn ABS in its first week of buying and a further €5.1bn in covered bonds. The ECB have a €1tn target for balance sheet expansion to jumpstart the European economy so they’ve gotten off to a pretty slow start. Investors will be looking for the ECB to up the pace of purchases to put them more on track to meet their €1tn objective.
A huge swing in oil prices sent UK shares Tullow Oil Plc (LONDON:TLW) and Premier Oil on a rocky ride; Tullow started the day down around 7% but recovered when Crude Oil prices swung back into positive territory.
Vodafone Group PLC (LONDON:VOD) shares traded lower after it emerged the company was in talks to buy ‘Blinkbox’ the online streaming site from Tesco. Blinkbox was always an odd fit for a supermarket but a mobile phone network may not be much better. It’s debatable how much of a pull it’ll be for Vodafone customers who already have access to iTunes, Google Play, Sky TV, Netflix Inc (NASDAQ:NFLX) and a host of other movie-streaming services through native apps on their phones. The move for Vodafone would make sense if this was part of a major effort to move into pay TV to compete against BT Group (LONDON:BT)’s foray back into mobile.
US
US markets got off to a rough start on Monday after survey’s indicated a big yearly decline in Black Friday spending but higher oil prices lifted oil shares and factory data that showed a much smaller decline than expected in November clawed back losses.
Having seen the biggest fall on Friday, Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) were top risers on the Dow 30 while Wal-Mart Stores Inc (NYSE:WMT) pulled back from 52-week highs in early US trading.
Shares in Apple Inc (NASDAQ:AAPL) saw a flash crash of 7% as investors fretted that the decline in Black Friday sales may lead to missed expectations for holiday sales of the new iPhone 6, 6 Plus and iPad Air 2.
FX
The US Dollar saw a big retreat on Monday as commodity prices led by Gold and Silver rebounded.
GBP/USD bounced over 150 pips from its multi-year low below 1.56 lows to beyond 1.5750 as dollar weakness combined with a resurgence in the UK manufacturing sector in November.
USD/JPY pulled back from highs of 119 as the dollar weakened and investors sought the traditional safe-haven on the Japanese yen in choppy trading.
USD/RUB was up by as much as 6% today as the Russian ruble collapsed alongside oil prices with downside pressure intensified by the Russian government now allowing the currency to freely float.
Commodities
It was a very volatile day in commodities which started the day sharply lower but dollar weakness allowed a surged in profit taking after energy prices hit multi-year lows.
Silver saw prices round-tripped by more than 10% having come close to $14 per oz only to jump beyond $16 in a huge short-squeeze.
Copper also rallied alongside other metals but still looks weak while below $3 per lb.
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.