US traders return after market holiday

There’s a softer tone across European bourses and US stock index futures this morning, thanks mainly to a poor set of earnings from HSBC. The banking giant reported a fall in pre-tax profits of 62% when compared with the same time last year. This was due to a number of one-off charges. Nevertheless, the profit slump was considerably worse than expected and the shares were down around 5% in early trade. But the negative market sentiment was offset to some extent by better-than-expected profits from hotels group Intercontinental and mining giant BHP Billiton and Anglo American.

This is a big day for updates on Services and Manufacturing PMIs. So far Germany has reported improvements in both data sets when compared to last month and consensus expectations. However, the French numbers were mixed with decent Services but disappointing Manufacturing data. The euro has fallen sharply in early trade while the dollar has strengthened, with the latter weighing on precious metals. Last week gold and silver looked as if they were both about to break out above resistance at $1,240 and $18 respectively. However, the two precious metals are out of favour this morning and will continue to struggle should the dollar strengthen further from here.