Europe
Equity markets are a mixed bag, the DAX is the best performer in the region, while the FTSE 100 is off 0.4%. Even though the London equity market is in the red, it would be losing much more ground if it wasn’t for the basic material sector. Miners like Glencore (LON:GLEN), Anglo American (LON:AAL) and Rio Tinto (LON:RIO) are the biggest gainers on the FTSE 100
Marks and Spencer (LON:MKS) announced a slowdown in their sales decline for the first-quarter, but it wasn’t enough to prevent traders from selling the stock. The food business is by far their best division and the retailer’s hopes the clothing and home division will be registering positive same-store-sales by the end of the year. M&S have been trying for several years now to bring the clothes and home operation up to scratch.
Pearson (LON:PSON) has fallen the most on the FTSE 100 after the company stated it sold a 22% stake in Penguin Random House (PRH) for $1 billion. Investors felt that it undervalued its position in PRH and it was only getting rid of it because their own business was struggling. Since hitting an all-time high in 2015, Pearson’s share price is down 57%.
US
The S&P 500 and the Dow Jones are broadly unchanged as the low volatility from Europe has carried across the Atlantic. US equity markets have been holding up better than those in Europe recently but that is not to say they are in amazing shape.
The indices have been range bound and just because we haven’t seen grinding lower, we have not seen any major confidence either. The nonfarm payrolls number is still in dealer’s minds, and the pretty good report that it was, sums up the current attitude.
It has been a slow start to the week, and it seems that US traders are content to wait until we have updates from Federal Reserve members later this week.
FX
The GBP/USD is lower on the day as traders were keeping an ear out for comments from UK central bankers Andy Haldane and Ben Broadbent, but neither said anything about monetary policy. Mr Haldane has been calling for higher interest rates recently, so dealers were anticipating something similar today, but the Bank of England’s monetary policy wasn’t mentioned. Mr Broadbent discussed international trade, but not his views on interest rates. Dealers were disappointed with the lack of monetary policy remarks, so they had little reason to be long the pound.
The EUR/USD was pushed higher by the solid industrial output numbers from Italy. The report for May showed a 0.7% increase and that topped the 0.5% that the market was expecting. The US job opening report for May came in at 5.67 million and economists were expecting 5.98 million. The April figure was revised lower to 5.97 million from 6.04 million. The report took away from the solid headline non-farm payrolls last week.
Commodities
Gold has managed to halt its decline in the early part of the day but it didn’t last. The commodity is now at the low of the day and dealers will be eyeing yesterday’s low. Considering the moves we have seen recently, it has been a quiet day for gold. Traders are still cautious about the Feds hawkish position, and the updates from US central bankers this week will be in focus.
WTI and Brent oil sold off during the morning but recouped all of the losses. The commodity is experiencing a relatively low amount of volatility. Goldman Sachs (NYSE:GS) stated oil could fall below $40 per barrel if OPEC doesn’t act. There has been some talk about Nigeria and Libya having to fall in line with the rest of OPEC members, but right now those counties want to take care of their own needs first.
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