Comment: European Markets Weak Again; Traders Wait For More Cues
February 26, 2014 7:50 am
Cautious financial markets in Europe; equities drop again, gold weakens and core government bonds in favour. FX markets steady with US stable and EUR holding ground. Market participants unenthused by performance of Asian and US markets overnight – on Wall Street, the S&P500 failed to make further big moves to the upside. Data out of the US was again damp – consumer confidence slipped this month and although S&P Case-Shiller home prices rose month on month, the year on year rate of growth did slow. US stock futures this morning appear relatively healthy ahead of the US open with markets now looking to US new home sales data.
Asian markets were a little firmer overnight but traders expressed concerns about monetary developments in China as the country’s currency hit its lowest level in nearly seven months versus the USD. Traders are of the view that the PBoC could introduce two-way volatility to change people’s view of the currency as a one-way bet. This would make sense as the Chinese government also look to reduce speculative excesses in credit and housing markets. Back to Europe, German consumer confidence rose for the fourth consecutive month, reaching a new record high since mid-2007; welcome news, consistent with the trend of upbeat German data out of all facets of the country’s economy. In the UK, the second release of Q4 GDP was confirmed at 0.7%, in line with estimates; decent result on the whole. In the broader European market, we are still seeing cash coming off the table as the temptation to book profits remain on lofty looking stock indices.
On corporate news, Credit Suisse shares get punished after a report from a US Congressional committee says the Swiss bank has been helping its American clients evade tax. CS Boss Brady Dougan is to defend the bank at the Senate subcommittee on allegations that the bank also helped to clients set up offshore shell entities to avoid paying taxes and then helped clients in structuring payments below $10k so US authorities are not alerted. In London, ITV shares are under the cosh despite reporting upbeat numbers in which pre-tax profit came in at £435million versus £334million in 2012 and with revenues increasing 9% to £2.4billion. That said, traders cited weaker ad revenues and disappointment over the special dividend payout of 4.0p. Furthermore, traders say there was also disappointment in the CEO Adam Crozier saying ITV are no longer interested in Channel 5.
Cautious financial markets in Europe; equities drop again, gold weakens and core government bonds in favour. FX markets steady with US stable and EUR holding ground. Market participants unenthused by performance of Asian and US markets overnight – on Wall Street, the S&P500 failed to make further big moves to the upside. Data out of the US was again damp – consumer confidence slipped this month and although S&P Case-Shiller home prices rose month on month, the year on year rate of growth did slow. US stock futures this morning appear relatively healthy ahead of the US open with markets now looking to US new home sales data.
Asian markets were a little firmer overnight but traders expressed concerns about monetary developments in China as the country’s currency hit its lowest level in nearly seven months versus the USD. Traders are of the view that the PBoC could introduce two-way volatility to change people’s view of the currency as a one-way bet. This would make sense as the Chinese government also look to reduce speculative excesses in credit and housing markets. Back to Europe, German consumer confidence rose for the fourth consecutive month, reaching a new record high since mid-2007; welcome news, consistent with the trend of upbeat German data out of all facets of the country’s economy. In the UK, the second release of Q4 GDP was confirmed at 0.7%, in line with estimates; decent result on the whole. In the broader European market, we are still seeing cash coming off the table as the temptation to book profits remain on lofty looking stock indices.
On corporate news, Credit Suisse shares get punished after a report from a US Congressional committee says the Swiss bank has been helping its American clients evade tax. CS Boss Brady Dougan is to defend the bank at the Senate subcommittee on allegations that the bank also helped to clients set up offshore shell entities to avoid paying taxes and then helped clients in structuring payments below $10k so US authorities are not alerted. In London, ITV shares are under the cosh despite reporting upbeat numbers in which pre-tax profit came in at £435million versus £334million in 2012 and with revenues increasing 9% to £2.4billion. That said, traders cited weaker ad revenues and disappointment over the special dividend payout of 4.0p. Furthermore, traders say there was also disappointment in the CEO Adam Crozier saying ITV are no longer interested in Channel 5.
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