UK and US Q3 GDP readings! The latest ECB rate vote and press conference! A slew of manufacturing and services PMIs! There’s so much stuff to look forward to this week – sadly none of it is today, with the markets having little reason to crawl out of bed this Monday.
What little movement there was came from the euro, which dipped 0.2% against both the dollar and the pound following the latest developments in Spain. On Saturday Prime Minister Mariano Rajoy announced he was imposing direct rule on Catalonia, stripping the region of its autonomy. Pushed into a corner, Catalan leader Carles Puigdemont and his government are set to meet over the coming days, something that could well result in a unilateral declaration of independence.
It’s the fear of such chaos that’s driving the euro lower, while also lopping off another half a percent from the Spanish IBEX. The other eurozone indices were less ruffled; the CAC fell 0.1%, with the DAX flat just below 13000.
As for the UK, there wasn’t much to speak of. Despite the ongoing Brexit uncertainty both the FTSE and pound held up pretty well after the bell; the former was down 0.1%, largely due to a red-tinged commodity sector, while sterling remained flat against the dollar, the wrong side of $1.32.
Yet there were signs of weakness in the UK economy that both currency and index seemed to ignore this Monday. British car dealership chain Pendragon (LON:PDG) plunged nearly 20% after warning on full-year profit, the company struggling with the declining demand for new cars and the impact this has had on the used car market. It’s the latest sign of retail-woe in the UK, especially among companies dealing with big ticket items, as the household spending squeeze continues.
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