Greek index down around 2%

European markets are trading relatively mixed on Tuesday, with the Greek index down around 2% after suffering enormous losses on its first trading day in five weeks. The banks are once again being pummeled which is not surprising given the damage suffered over the last five weeks and the capital controls that remain in place. In reality, it could be even worse if daily loss limits and a ban on shorting hadn’t been put in place.

It’s been a fairly quiet day so far, by this week’s standards anyway. The UK construction PMI fell to 57.1 in July, from 58.1 previously. The drop may have fallen below expectations of a small improvement, given the flat contribution to the second quarter GDP figure, it shouldn’t come as a huge surprise. That said, the figure remains healthy and may point to a pick up in the sector in the second half of the year. Meanwhile, unemployment in Spain fell by 74,000 in July which was much better than what the markets were expecting.

As highlighted, this is one of the quieter sessions of the week with the only notable release from the US being June factory orders. This number can be quite volatile and we’re expecting that to be the case again, with a rebound in June of 1.8% from a decline of 1% in May.

Commodity markets are likely to remain a key focus for the markets today having experienced heavy selling again on Monday. We are seeing those losses being pared early in the session today, but as of yet there are few signs that the gains are anything more than that. Gold and silver remain near five year lows, while oil is struggling to even put a dent in yesterday’s losses and looks likely to test this year’s lows in the coming weeks.

Aside from already trading near lows, there seems to be very little case to be bullish about commodities right now. The ongoing challenges faced in China is having a great impact, as is the strength of the dollar. The low inflation environment despite the huge amounts of liquidity being pumped into the markets and the prospect of higher rates in the US and UK takes a lot of the appeal away from Gold as an inflation hedge. That said, they are all trading at historical low levels at the moment so prices may begin to stabilise once again.

The S&P is expected to open 3 points lower, the Dow 44 points lower and the Nasdaq 5 points lower.