ETX Capital Daily Market Bite, 4th March, 2013: Markets Weaken On Italy And US Sequesters
March 4, 2013 10:48 am
March 4th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets are back under the cosh Monday, with traders unwinding positions on political uncertainty in Italy and the lack of progress by US lawmakers to tackle the sequester which kicked off on Friday last week. Italian leaders are still divided over how to form a government following last week’s inconclusive elections.
Italy’s President Napolitano will look to form another technocrat government but markets remain unconvinced on how viable such a government would be given the strong anti-austerity attitude which has gained popularity in Italy. If no government can be formed, Italians would head to the poll, prompting even more caution in the coming months.
Meanwhile, in the US, the sequesters kicked off on Friday and over the weekend, we heard from House Speaker John Boehner that lawmakers remain at loggerheads on spending cuts. Republicans on Sunday insisted they will not surrender their aim to reduce government spending but the Democrats are showing little signs of negotiating. If lawmakers fail to agree on taming the automatic cuts, these cuts could shave off around 0.5% of US GDP. Looking to today’s agenda, we have Spanish unemployment numbers and UK construction PMIs and euro zone PPIs.
March 4th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets are back under the cosh Monday, with traders unwinding positions on political uncertainty in Italy and the lack of progress by US lawmakers to tackle the sequester which kicked off on Friday last week. Italian leaders are still divided over how to form a government following last week’s inconclusive elections.
Italy’s President Napolitano will look to form another technocrat government but markets remain unconvinced on how viable such a government would be given the strong anti-austerity attitude which has gained popularity in Italy. If no government can be formed, Italians would head to the poll, prompting even more caution in the coming months.
Meanwhile, in the US, the sequesters kicked off on Friday and over the weekend, we heard from House Speaker John Boehner that lawmakers remain at loggerheads on spending cuts. Republicans on Sunday insisted they will not surrender their aim to reduce government spending but the Democrats are showing little signs of negotiating. If lawmakers fail to agree on taming the automatic cuts, these cuts could shave off around 0.5% of US GDP. Looking to today’s agenda, we have Spanish unemployment numbers and UK construction PMIs and euro zone PPIs.
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