IG Market Comments

European equities are lower across the board this morning, and the FTSE is 30 points lower at the ominous 6666 level.

Rather unsurprisingly it is PMI data from the eurozone that has left a dampener on equities in early trade. A comfortable miss in Germany drags the overall eurozone figure towards the water line. Having managed to grow last month, Europe’s engine room narrowly avoided a return to contraction with a reading bang on the 50 line. It won’t have escaped Euro-sceptics that despite sentiment indicators telling us otherwise, the composite figure is at its lowest since mid-2013. The Euro has moved modestly lower than this. So far this week it has failed to make a lasting break through the $1.2575 area on three occasions, and the move back towards $1.25 is somewhat of a foregone conclusion.

On the equities front we have an ugly looking mining sector dragging the FTSE lower. Again this is the cause of a breadline PMI number, with China giving us its manufacturing print courtesy of HSBC. After what might best be described as a ‘dovish-ish’ Fed minutes release last night, we may have expected more help for equities today, but hawks are getting a little more help in the UK than they are elsewhere. After yesterday’s Bank of England takeaway that 7-2 is much closer to 4-5 than it is to 9-0, a blowout retail sales figure for October (0.8% versus 0.3% expected) has given us a platform into the Christmas spending spree, and continued numbers like that would certainly give savers a reason to be shouting for a rate rise.