ETX Capital Daily Market Bite, 5th February, 2013: European Markets Rebound Despite Political Drama
February 5, 2013 10:41 am
February 5th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets are again on the softer side this morning following hefty losses in the previous session and across US and Asian share markets overnight. Renewed euro zone debt concerns sparked by political instability in Spain and Italy have rattled investor sentiment, prompting traders to book profits following a stunning month of gains in January.
Allegations of corruption in the current Spanish government raises the spectre of an impending sovereign bailout or even exit from the euro zone. A removal of the current government there would pave the way for a general election and open the door for leftist parties against the euro zone to gain support in the polls.
In Italy meanwhile, former premier Silvio Berlusconi is closing the gap on front-runner Pier Luigi Bersani ahead of the general elections. Traders are fearing that a win for anti-austerity Berlusconi would derail Monti’s work to repair Italy’s dire finances. As such, market participants are adjusting their appetite for risk and turning much of their attention to the ECB’s post rate setting press conference for more clues over how the central bank view the current developments in the euro zone.
Earning however are likely to keep market participants busy in the run up to the ECB meeting. Today, we have had some high profile numbers from ARM Holdings, BP, UBS, BG Group and Munich Re to name a few. In terms of economic data, euro zone PMI services data will be under close inspection after last week’s better than expected PMI manufacturing numbers from the region. The euro zone will also print retail sales numbers while the UK will post its PMI services report.
In the US, we have ISM non-manufacturing services data too, again, likely to catch much of the attention this afternoon. In the debt market, European Stability Mechanism, Belgium, Greece and Switzerland are all lined up to sell bills.
February 5th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets are again on the softer side this morning following hefty losses in the previous session and across US and Asian share markets overnight. Renewed euro zone debt concerns sparked by political instability in Spain and Italy have rattled investor sentiment, prompting traders to book profits following a stunning month of gains in January.
Allegations of corruption in the current Spanish government raises the spectre of an impending sovereign bailout or even exit from the euro zone. A removal of the current government there would pave the way for a general election and open the door for leftist parties against the euro zone to gain support in the polls.
In Italy meanwhile, former premier Silvio Berlusconi is closing the gap on front-runner Pier Luigi Bersani ahead of the general elections. Traders are fearing that a win for anti-austerity Berlusconi would derail Monti’s work to repair Italy’s dire finances. As such, market participants are adjusting their appetite for risk and turning much of their attention to the ECB’s post rate setting press conference for more clues over how the central bank view the current developments in the euro zone.
Earning however are likely to keep market participants busy in the run up to the ECB meeting. Today, we have had some high profile numbers from ARM Holdings, BP, UBS, BG Group and Munich Re to name a few. In terms of economic data, euro zone PMI services data will be under close inspection after last week’s better than expected PMI manufacturing numbers from the region. The euro zone will also print retail sales numbers while the UK will post its PMI services report.
In the US, we have ISM non-manufacturing services data too, again, likely to catch much of the attention this afternoon. In the debt market, European Stability Mechanism, Belgium, Greece and Switzerland are all lined up to sell bills.
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