KBC Market Research Desk
KBC Bank
European shares lost further ground today as geopolitical tensions and yesterday’s sharp losses on Wall Street weighed on sentiment. US Equities opened somewhat lower following slightly disappointing payrolls, but recovered afterwards supported by a strong ISM reading.
The US payrolls report came out slightly weaker than expected as hiring slowed to 209 000 from 298 000 and the unemployment rate picked up to 6.2%. The main disappointment came however from the wage data.
The cease‐fire in Gaza, which was meant to last three days and would be the start of new peace negotiations, collapsed today as fighting erupted between Israeli forces and Hamas.
The US manufacturing ISM made a strong rebound in July, rising from 55.3 to 57.1, the highest level since April 2011. Growth in new orders and production accelerated and employment reached a 3‐year high.
The UK manufacturing PMI weakened substantially in July, falling from 57.2 to 55.4, while only a marginal drop was expected. Sterling weakened significantly today.
Stronger US data on jobs and inflation have moved the Fed closer to a first rate hike, Fed’s Fisher said in an interview today, adding that a first rate hike early next is very possible.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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