Having briefly pared their losses mid-morning thanks to some reassuring comments from Janet Yellen, the European markets couldn’t completely shake their weak start to the week.
The former Fed chair put forward the argument that the yield curve inversion that sparked fears of a US recession may instead actually be a sign that interest rates need to be cut, an idea that immediately held sway with investors and erased much of the day’s early decline. Add onto that a better than forecast German Ifo business climate reading, and it seemed that Europe had picked itself up off the floor.
This turnaround didn’t last long, however. Despite the pound looking slightly nervier than it did just after the bell – the pound fell 0.2% against the dollar and 0.3% against the euro – the FTSE fell 30-odd points, keeping it the wrong side of 7200 and its worst price in nearly a fortnight.
The eurozone indices did admittedly fare a tad better than the FTSE. The DAX and CAC trimmed their losses to 0.1% and 0.2% respectively, a significant turnaround for the latter, which started the day down 0.6%. Turning to the US open and the Dow Jones is facing only a mild dip after the bell, a 20 point drop that would take it under 25500.
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