What was already a bad session turned disastrous following another round of dire PMIs from the Eurozone, the markets caught in a perfect storm of UK political turmoil, US-China trade warmongering and European economic softness.
The last thing the market needed on Thursday was a reminder of the Eurozone’s manufacturing and services sector woes. For the region as a whole, the former fell even further into contraction territory, hitting 47.7; the latter, meanwhile, dropped from 52.8 to 52.5 month-on-month, missing the 53.0 analysts had estimated. The sour cherry on top was a lower than forecast German Ifo business climate reading, the worst since early 2010.
This news gave the European indices an unneeded gut-punch when they were already feeling mighty morose, the day having started with Panasonic (LON:0QYR) becoming the latest company to sever ties with Huawei, serving only to further heighten trade tensions between the US and China.
The DAX found itself plunging 250 points, sinking under 11950 in the process, with the CAC not far behind as it fell 1.8%. The FTSE, meanwhile, doubled its initial losses, dropping just shy of 120 points to hit a 9-day low. The Dow Jones is set to follow suit when the bell rings on Wall Street, the futures pencilling in a 260 point dive this afternoon.
The awful Eurozone data did help someone out: the Brexit-depressed sterling managed to erase its early losses against the euro, causing it to lift from the morning’s 4-month nadir. It had no such luck against the dollar, however; cable remains at its worst price since January 3rd, even if it is now down only 0.2%.
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