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Capital Spreads Morning Call:
FTSE -15 points at 6607
DAX -22 points at 9452
CAC -16 points at 4000
The FTSE 100 is set to open 15 points lower at 6607 on Wednesday morning with continuing protests in Hong Kong and suturing economic performance in china keeping investors on Edge. The Bulls seem to have brushed off economic data on Tuesday which showed that the UK economy grew more than expected in the second quarter, instead the ongoing protests in Hong Kong remain the focal point of attention.
Pro-democracy crowds have gathered in numbers with tens of thousands of people blocking parts of Hong Kong this week. Despite Tuesday night being relatively quite many are expecting the largest turnout yet on National Day, a public holiday celebrated throughout mainland China, Hong Kong, and Macau.
The US consumer confidence figures shows an unexpected decline in September to 86 versus estimates for 92.2 which pushed the Dow Jones 45 points lower to 17,015.5. At the same time the S&P Case Schiller index for US properties indicated smallest increase in values for 12 month which could signal renewed struggles for housing.
The shared currency resumed its slump against the greenback yesterday, falling to the weakest level in two years at 1.2571 and eventually rebounding slightly to end the day 54 pips in the red at 1.2631. The move was sparked by yet another sign of a slowdown in inflation which gave the ECB extra reasons to act and add further monetary stimulus.
We saw a sharp plunge in WTI crude prices of $3.01 to $91.32 a barrel as conflict in the Middle East fails to spook the energy market of potential supplies disruptions. For all that talk about OPEC action to support oil prices, output increased in September due to production hike in Libya to the strongest level in more than a year.
And we are off south again for gold prices to a fresh recent low, last seen in January following another rally in US dollar (in which gold is priced). The precious metal dropped $6.5 to $1208.7 as the timing of higher interest rates in the US draws near.
Marius is a Dealer at Capital Spreads. His involvement with CFDs and spread betting started in 2008 after graduating from London Metropolitan University with a MSc in Finance. He contributes to the Daily Comment by providing a snapshot of the FX, indices and commodity markets (oil and gold).
Jonathan is a dealer at Capital Spreads. Having started his career in the city trading interest rate and bond derivatives in 2005, he then entered the spread betting and CFD industry in 2007 by joining the dealing desk at City Credit Capital. After successfully managing multiple asset risk books across the European, US and Asian time zones throughout the height of the financial crisis, he then took that experience to Capital Spreads in 2010.
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