Europe
Slowing manufacturing and service sector data for France and Germany stifled hopes of a Eurozone economic recovery and sent shares lower on Thursday.
The PMIs were against a recent trend of improved data from the Eurozone, though do match a fall in German investor confidence reported by ZEW on Monday.
The German DAX fell over 1.5% and following yesterday’s weakness has undone most of its weekly gains. The index was led lower by Deutsche Bank (XETRA:DBKGn) which has been ordered to pay a record $2.5bn fine to regulators and sack seven more individuals in connection with the manipulation of the benchmark interest rates. Deutsche’s slow response, reportedly including misleading the FCA has cost the bank dear and brings into question management decision-making since regulators first made contact.
In the UK, a surprise decline in retail sales capped gains in the FTSE 100 as utilities stocks including United Utilities, SSE (LONDON:SSE) and Centrica (LONDON:CNA) were top risers on a broker upgrade. A bounce back after poor results yesterday from Tesco (LONDON:TSCO) and more job cuts at Sainsbury’s helped supermarkets trade higher, with Morrisons up in sympathy.
US
Another mixed dose of earnings and weaker than expected economic data constrained US stocks to narrow gains on Thursday.
General Motors (NYSE:GM) missed top and bottom line estimates as the car company wrote down the closure of its Russian manufacturing plant. Sales were also down in South America in part due to local currency weakness against the dollar. The international headwinds are undoing the positives of multi-year highs seen in US auto-sales and a slowdown in recalls.
Caterpillar beat top and bottom lines estimates as revenues fell less than expected over the prior year period. A pick up in US construction went some way to offset weakness globally, particularly in China.
3M (NYSE:MMM) shares fell after the company reported earnings and revenues short of estimates and revised down its full-year guidance, citing the impact of a strong dollar.
FX
The US dollar was mixed as data was equally bad across the board leaving no discernable winners.
New Zealand dollar came in for heavy selling as missed Chinese PMI numbers added to concerns the Reserve Bank of New Zealand may be set to begin rate cuts.
The British pound traded lower after weak retail sales while a day of relief over Greek concerns saw some short-covering in the euro, helping EUR/GBP above 0.7150 and EUR/USD back to 1.08.
Commodities
Saudi Arabia’s renewed bombing campaign in Yemen sent crude oil higher, with Brent rising 3% to new 2015 highs. WTI was also higher by 2.5%, almost undoing losses at the hand of inventories data over the past two days.
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