European markets remain in the doldrums ahead of the ECB, while easyJet has fallen into the red for the year despite news of a rejected bid.
European markets down again, led by the FTSE 100.
ECB taper provides a reason for concern.
EasyJet’s gains for the year disappear.
Pre-ECB nerves are firmly in evidence in European stock markets this morning, although it is the FTSE 100’s turn to be at the head of the declines after following in the wake of its continental brethren yesterday. The ECB has form in fumbling the ball mid-crisis, and memories of Lagarde’s miscommunication early in her tenure haven’t altogether dimmed, so there is a clear sense that it doesn’t make sense to be too bullish going into today’s meeting. Should the central bank opt not to taper asset purchases, it could provide the respite risk assets are looking for, and would certainly help reverse the negative sentiment of the past few days; comments from Fed speakers such as Kaplan about continuing with a US taper despite last week’s poor NFP print have also set the cat among the pigeons, and while US futures are edging up the note of caution in early European trading is likely to carry across into the afternoon.
Early losses for easyJet following news of a rejected takeover and a rights issue have pushed the shares into negative territory for the year, which rather underlines how expectations of a sudden return to flying and holidays at the beginning of the year were misplaced. The optimism of early April has been replaced by increased pessimism, which for some dip buyers will doubtless be irresistible. Today’s bid news shows that some people at least clearly think easyJet is good value at current levels.
Ahead of the open, we expect the Dow to start at 34,928, down 103 points from Wednesday’s close.
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