The Morning Market View:
This morning markets are bouncing back after yesterday’s slump. The Dow Jones dropped 2.49%, with further losses coming after hours after Cisco’s earnings missed expectations.
Yesterday the euro fell significantly ahead of other non yen/dollar pairs, possibly linked to the news that the EU had ordered Germany to include nationalised bank’s debt on its balance sheet.
This morning the bounce bank is setting in as it often does after major sell offs. The euro is making inroads into yesterday’s losses, especially against the yen which is bidding higher on central bank talk of currency intervention.
The pound fell less than other currencies so is better placed to recover yesterday’s losses. However, at best the GBP/JPY is just half way through yesterday’s range.
Today’s main announcement for the financial markets is US unemployment claims at 13.30 with a drop expected on last month’s numbers.
The Afternoon Market View from Spreadex:
It’s been another dark day for equities markets, as the majority of Dow components started in the red and UK shares from Barclays to British Airways and BHP Billiton are all suffering losses.
Vedanta seems to have picked the wrong time to acquire the Indian arm of Cairn Energy, and traded more than 100p off its high of 2327 at the open.
Two factors are weighing on the miner—investors don’t see the sense in a miner wandering into the less-than-clear waters of oil exploration, and also feel this environment isn’t conducive to cultivating such growth right now, as macro data continue to show deficiencies in both labour and trade.
It is now well off its 3-month high of 2630 from Monday, and will not be returning to those levels anytime soon. The fall could continue to the mid-July low of 2169; otherwise, support may not come until the 2046 range.
We’re expecting continued selling today, with no other market-moving macro data expected until tomorrow’s CPI and Confidence survey from the US.