Despite an eye-watering drop in the Asian session, prompted by duel macro-downers of a new set of US tariffs on Chinese goods and the whiff of eurosceptic Greek tragedy around Italy’s political pile-up, the European indices avoided anything too ugly after the bell.
With a meeting between Italy’s PM-designate Carlo Cottarelli and President Sergio Mattarella on the cards, one that may result in the announcement of a snap election, you’d expect the euro to be a mess. Yet while the single currency isn’t out of its sickbed just yet, it has managed to lift off of the 10 month lows struck against the dollar overnight, rising 0.4% to tease $1.1575. It’s also up 0.2% against the pound, nudging back above £0.87.
Following yesterday’s bloody performance the eurozone indices are similarly more sanguine this Wednesday. The DAX is up 0.2%, and is trying its best to re-cross 12700 having briefly fallen below 12600 – a one month low – on Tuesday, with the CAC flat at 5390. Italy’s FTSE MIB was actually the most upbeat, rebounding 0.6% as investors cling onto hopes that this whole situation can avoid the kind of prolonged, and costly, crisis that engulfed Greece a few years ago.
As for the FTSE, it showed no signs of bouncing back this Wednesday. Dipping 0.1%, the UK index is just about holding above 7600, and is back at levels not seen since for 3 weeks. With little else on its agenda, the FTSE will be hoping that things don’t take another downturn in the eurozone (or, indeed, the US).
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