Europe
We’ve seen European markets continue to come under pressure today as the prospects of a Greek deal continue to recede into the distance, remaining as elusive as finding the proverbial mirage in the desert.
The German DAX has continued its decline, hitting a four month low before rebounding, while the FTSE100 has also slid back to its lowest levels since mid-January after Greek finance minister Varoufakis ruled out making any new proposals to EU officials in the days ahead, while Greek Prime Minister Tsipras accused the ECB of asphyxiating his country, and blaming the IMF for “criminal” responsibility for the country’s plight.
In classic risk off fashion it is the more defensive sectors that are holding up the best with the cyclical sectors bearing the brunt of today’s weakness, though we have seen markets pull back from their lowest levels of the day.
Among the larger decliners the basic resource stocks come under pressure with Anglo American (LONDON:AAL) and Antofagasta (LONDON:ANTO) leading the way.
International Airlines Group (LONDON:ICAG) is also under pressure on fears that the spread of MERS could well start to see people reluctant to travel to those areas that are currently dealing with the outbreak.
Despite posting some decent profits industrial plant hire company Ashtead Group (LONDON:AHT) is looking a little poorly despite strong growth in UK and US markets.
Tobacco companies BAT (LONDON:BATS) and Imperial Tobacco are among the best performers on the back of a broker note on the sector from Credit Suisse (SIX:CSGN).
US
US markets opened slightly lower today following in the tracks of the weakness in Europe ahead of the start of the latest two day FOMC meeting, finding some level of support just above one month lows.
US policymakers will have to weigh up the weakness still being manifested in the manufacturing sector of the US economy and the weak economic data yesterday, against some of the upbeat numbers last week when it deliberates about the state of the US economy.
Today’s economic data also came in mixed with housing starts dropping sharply by 11.1% in May, significantly down from the 22.1% rise in April. Building permits were slightly more positive, coming in at 11.8%, well above expectations of a 3.5% decline.
Stocks in focus are likely to include US retailer Gap after the company announced that it would be closing 175 stores, and laying off 250 workers from its HQ staff.
Later on, after the bell Adobe Systems (NASDAQ:ADBE) will be announcing its latest Q2 earnings numbers with estimates of $0.45c a share on sales of $1.16bn.
FX
The pound has been among the best performers today despite the latest inflation data coming in more or less in line with expectations. If anything it came in a little short of expectations with both core CPI and retail prices coming in shy of estimates.
Despite initially trading higher the euro has succumbed to the barrage of negative headlines out of Europe today trading back down towards one week lows as both sides continue to reiterate their positions and in so doing reinforce the huge gulf between them.
Commodities
Oil prices have taken a brief pause after three days of declines ahead of weekly inventory data due out tomorrow. While Brent prices have more or less trod water today, US prices have found some level of support from reports of a tropical storm in the Gulf of Mexico which has seen the evacuation from some of the platforms in the region.
CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.