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FTSE -6 points at 6690
DAX -4 points at 11305
CAC -3 points at 5080
European equities are set to slip on weak US and Chinese data. It’s a bad start for China already what with 2 disappointing Manufacturing PMI figures over the weekend, although it really shouldn’t have been a surprise. Also adding do the downward pressure was a weak close in the US on poor wage growth and consumer sentiment. Looking at the expected marginal dips this morning though; markets don’t seem to be too shaken about either point.
A weak reading for the US wage growth fuelled speculation the Fed could delay raising interest rates. On the other hand a big slump in energy stocks led by Exxon Mobile and Chevron where profits plummeted on low oil prices, offset gains in other sectors. Overall the Dow Jones closed modestly down, 42 points to 17,712 on Friday.
As US salaries rose last quarter at the slowest pace on record, the greenback was under pressure versus the euro which rallied sharply to above 1.11 helped also by stop-loss buy orders being hit. However, the afternoon session brought a steady pullback with the EURUSD pair ending just 49 pips up at 1.0982. According to the International Monetary Fund the growth outlook for the euro region remains ‘subdued with a chronic lack of demand and weak productivity’.
WTI crude prices posted the biggest monthly plunge since 2008 amid oversupply concerns ending the session $1.64 down at $46.81 a barrel. To make matters worse, Iran announced it will boost output immediately after sanctions are lifted. Meanwhile gold rebounded $6.9 to $1095.5 on Friday but is expected to remain under pressure on rates outlook.
Ipek Ozkardeskaya is a Market Analyst at London Capital Group. She has strong technical background in quantitative finance. Previously, she worked as FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.
Marius is a dealer at Capital Spreads. His involvement with CFDs and spread betting started in 2008 after graduating from London Metropolitan University with an MSc in Finance. He provides analysis of the forex, stock index and commodity markets, with a particular focus on oil and gold.
Jonathan is also a dealer at Capital Spreads. Having started his career in the City trading interest-rate and bond derivatives in 2005, he 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 through the height of the financial crisis, he joined Capital Spreads in 2010.
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