With the pound recovering its early losses, and the Dow Jones facing a sharp fall when the bell rings on Wall Street, the FTSE struggled this Tuesday.
Falling half a percent – and at one point flirting with lows not seen since the end of December – the UK index has roundly lost the momentum that propelled it higher in the first half of the month. It didn’t help, of course, that cable reversed a 0.6% decline to rise 0.1%, leaving it just below $1.41.
The eurozone indices shared the same fate as the FTSE – despite the region posting a decade high annual GDP reading of 2.5% the DAX and CAC fell 0.4% and 0.3% respectively. And it’s not even like the euro got much juice from the GDP reading either, with the currency up just 0.1% against the pound and 0.2% against the dollar (admittedly it was wallowing in the red against the greenback in the early hours of the session).
Informing this Europe-wide decline is the 150 point drop expected from the Dow Jones later this afternoon, a decline that comes on top of the index’s near 200 point fall on Monday. That would leave the Dow at a 5 day low, with equities investors seemingly concerned about the rise in US bond yields – the Treasury yield is at a near 4 year peak – and what that suggests about US inflation expectations, and therefore the Fed’s 2018 schedule, ahead of Wednesday’s central bank meeting.
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