Despite some stellar manufacturing PMIs the European indices were coated in claret this Friday morning.
Coming in at a far better than expected 4 year high of 58.2, you’d expect November’s manufacturing reading to get sterling all excited. However, the pound seems spent after a few sessions of 9 week peak-hitting exertion, with the currency falling 0.2% against both the dollar and the euro.
Even more interesting was the fact that the FTSE couldn’t use this moment of sterling weakness for its own gain; instead the UK index dropped half a percent, falling below 7300 for the first time since the end of September. The main drag came from the banking sector, with RBS (LON:RBS) spooking its peers by announcing some savage branch closures and job cuts.
Things were similarly negative in the eurozone, where the DAX and CAC plunged 1.6% and 1.3% respectively despite the fact that the euro only saw relatively mild growth following a 17 year high manufacturing PMI of 60.1.
Looking to this afternoon and the Dow Jones is set to join Europe in the red, with the index facing a 0.3% fall when the bell rings on Wall Street. Still, that kind of decline is nothing for an index that has rocketed 600 points higher since Tuesday. As for the US manufacturing PMIs, the Markit reading is expected to fall from 54.6 to 53.8, while the ISM number is forecast to dip from 58.7 to 58.4.
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