Richard Perry
Independent Analyst
There is an uncertain feel to financial markets at the moment. Earnings season in the US has failed to ignite the bulls on Wall Street, where despite a string of positive corporate numbers and a nice beat of expectations on the existing home sales yesterday, the S&P 500 closed 0.5% higher and is still rangebound. Furthermore, overnight the data out of Asia was disappointing. Flash manufacturing PMI readings for both Japan and China both missed expectations and also worryingly showed that they were falling below 50 and into contraction territory. Although Asian markets have been mixed to slightly positive in their response, the European markets may not fare so well. Early trading shows a mixed response but negative data out of China will usually weigh on markets such as the FTSE and the export heavy DAX.
Forex trading shows that the US dollar has begun to strengthen as the European session has got underway, with euro and sterling both weaker. The big mover though has been the Kiwi dollar which has come under pressure after an official from the Reserve Bank of New Zealand suggested that weaker demand and prices could prompt a decrease in interest rates to be considered. The kiwi is over a percent lower as a result.
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