With the euro bearing the brunt of the Italian election fallout, the European indices bounced back from an initially troublesome open this Monday.
The single currency wasn’t just dealing with the destabilising swell of populism in Italy, and the potential for a hung parliament, but a weaker than forecast series of services PMIs, with the region-wide reading unexpectedly falling from 58.0 to an admittedly still decent 56.2.
This took the euro 0.2% lower against the dollar, where it now finds itself the wrong side of $1.231, and 0.4% against the pound, with sterling lifting back above €1.123 having hit a 3 month nadir last week. And while the FTSE MIB is down 0.66%, an improvement on its early 2% drop, this euro-retreat helped send the DAX and CAC up 0.7% and 0.3% respectively.
As for the FTSE, it could only manage a muted 0.1% increase, with the index stuck looking sour below 7100. That’s because the pound got all the juice from the UK’s far better than forecast February services PMI – it rose from 53.0 to 54.5 – allowing the currency to climb back above $1.38 against the dollar while getting a leg up over the euro.
Turning to this afternoon and the Dow Jones – which really suffered in the aftermath of Donald Trump’s apple cart-upsetting, trade warmongering comments on steel and aluminium tariffs – is keeping its cards close to its chest. The Dow is set to open flat just above 24500, with the afternoon’s focus arguably on the Markit and ISM services PMIs; the former is forecast to rise from 53.3 to 55.9 month-on-month, but with the latter dropping from 59.9 to 58.9.
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