European markets recover following terror attacks in Brussels

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Wednesday 23rd March 2016

Market Index Closing Level Move on day Intraday Market Range
CAC 4,431.97 – 34.71 4,358.57 – 4,431.97
DAX 9,990.00 + 41.36 9,762.57 – 9,990.00
Dow Jones 17,582.57 – 41.30 17,540.40 – 17,648.90
FTSE 6,192.74 + 8.16 6,110.39 – 6,193.47
IBEX 8,992.00 – 29.00 8,840.40 – 8,992.00

Closing Markets Summary

Dow Jones

Stocks in the US closed mostly lower on Tuesday after a series of deadly attacks in Brussels unsettled global markets and weighed on investor sentiment. Although stocks in Europe fell sharply early in the day following reports of explosions at Brussels’ Zaventem airport and the city’s Maalbeek metro station, the DAX and CAC 40 reversed course to end up while the Stoxx 600 pared losses to close only slightly lower. Economic data showed that Markit’s flash US manufacturing PMI nudged up to 51.4 in March from 51.3 the previous month, missing forecasts of 51. Separately, a measure of manufacturing activity in the lower US Atlantic region rose in March to its strongest level in nearly six years, the Richmond Federal Reserve said. The Richmond Federal Reserve’s composite factory index rose to +22 points in March from -4 in February, surpassing expectations of 0. US house prices nudged higher in January, the Federal Housing Finance Agency’s monthly house price index rose 0.5% month-on-month in January to 230.7. Companies that featured include travel and leisure stocks, American Airlines ended lower after it refuted earlier reports that the two explosions at Brussels international airport occurred next to its check-in desk. Expedia, Priceline and Carnival Corp. were also lower. Apple Inc. shares were higher despite the fact that some analysts said the iPhone maker’s product event on Monday was underwhelming. Cisco Systems Inc. ended lower after the maker of networking gear on Monday announced a set of executive shifts. The Dow Jones closed down 41.30 points at 17,582.57, ending a seven-session winning streak. The Nasdaq Composite closed up 12.79 points at 4,821.66. The S&P 500 closed down 1.80 points at 2,049.80.

Europe

European markets shook off early losses to close higher with travel and leisure stocks managing to close well above their intra-day lows despite the terror attacks in Brussels. The mood was downbeat as market participants took in news of the terrible events in Brussels. At least 34 people were killed and more than 180 were injured as suicide bombers launched twin attacks on Brussels’ Zaventem airport and the city’s Maalbeek metro station. The earlier part of Tuesday’s session saw investors move in to safety, with the yen, gold and government bonds all making strong gains, but this was less apparent by the closing bell. Among individual stocks, InterContinental, TUI and Thomas Cook were all on the back foot, but the likes of Ryanair, EasyJet and IAG managed to recoup earlier losses. Oil prices were mixed. West Texas Intermediate was down 0.3% to $41.41 per barrel and Brent crude was up by 0.527% at $41.76. Economic data showed that the latest survey from the ZEW Center for European Economic Research revealed that German investor confidence was weaker than expected in March. The IFO Institute painted a brighter picture, as its business climate index climbed to 106.7 from 105.7 a month ago, higher than the forecast of 105.9. The composite PMI for the Eurozone rose in March, signalling a modest pick-up in activity. Companies that featured included holiday operator Thomas Cook which suffered a blow not just from the Brussels attacks but also after it cautioned that summer bookings will be below the previous year following terrorist attacks in Turkey and Egypt. Air France-KLM SA fell 4%, French hotel group Accor SA was down 3.9%. British Airways parent International Consolidated Airlines Group was down 1.5% and low-cost airline Ryanair Holdings PLC dropped 2.2%. Deutsche Lufthansa AG declined 1.3% were all lower on the back of the attacks. On regional markets the CAC closed up 34.71 points at 4,431.97, the DAX closed up 41.36 points at 9,990.00 and the IBEX closed down 29.00 points at 8,992.00.

FTSE

The FTSE ended marginally higher on Tuesday, reversing initial early session losses which were seen after the explosions in Brussels hurt investor sentiment. The terrorist attacks in Brussels left at least 34 people were killed and many others injured after suicide bombers launched twin attacks on Brussels Zaventem airport and the city’s Maelbeek metro station on Tuesday morning. According to news reports Islamic state have claimed responsibility. Travel and leisure stocks plunged following the reports including International Consolidated Airlines, InterContinental Hotels Group, TUI AG, Carnival and Thomas Cook. Economic data showed that UK inflation remained depressed at low levels in February as rising food prices were offset by falling prices for second-hand cars and bicycles. The Office for National Statistics reported that the consumer price index remained at 0.3% in February compared to the same month last year, which was below forecasts for a slight rise to 0.4%. Core inflation held at 1.2%, rather than nudging up to 1.3% as had been forecast. In its February Quarterly Inflation Report, the Bank of England forecast inflation to average 0.4% in the first quarter. Oil prices were mixed with Brent crude rising 0.26% to $41.65 per barrel and West Texas Intermediate falling 0.41% to $41.35 per barrel. Companies that featured include Randgold Resources which rallied as investors sought a safe haven following the Brussels attacks. Wolseley moved higher as the plumbing and heating products group stressed the resilience of its first-half performance, lifting the dividend 10%. Sports Direct dropped after founder Mike Ashley said the company was not trading well. Ashley told The Times he was concerned that the sportswear retailer was losing momentum and said he would refuse to appear before a Commons select committee in June. IG Group moved higher after posting an 18% rise in third-quarter revenue and saying it was entering the fourth quarter in a strong position. The FTSE closed up 8.16 points at 6,192.74.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
New Home Sales Feb 510K; 3.2% m/m 494K; -9.2% m/m High
Crude Oil Inventories March 3.000M 1.317M High

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
PPI (Spain) March -2.5% y/y Low
Wage Inflation (Italy) Feb 0.0% m/m; 0.7% y/y Medium
BUBA President Weidmann Speaks (Germany) March Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
No Data

Other Global Economic Data Expected

Type Period Forecast Previous Importance
ZEW Expectations (Switzerland) March -5.9 Medium
Economic News Round Up MarketsWorld Bars

Activity in the US manufacturing sector increased slightly in March, Markit reported that its flash manufacturing PMI for March inched forward to 51.4 from the prior month’s final reading of 51.3, missing forecasts for a reading of 51.8. The Federal Reserve Bank of Richmond manufacturing index rose last month, the Federal Reserve Bank of Richmond reported that the Richmond Manufacturing Index rose to a seasonally adjusted annual rate of 22, from -4 in the previous month. Forecasts were for the Index to fall -1 last month.

Economic activity in the Eurozone rose to a three-month high in March, market research group Markit reported that its Flash Eurozone Composite Output Index, which measures the combined output of both the manufacturing and service sectors rose from 53.0 in February to 53.7 in March, above forecasts for 53.0. The flash services purchasing managers’ index improved to 54.0 this month from 53.3 in February, beating forecasts for a reading of 53.3. The preliminary Eurozone manufacturing purchasing managers’ index inched up to a seasonally adjusted 51.4 this month from a final reading of 51.2 in February. Forecasts were for the index to rise to 51.3 in March. The ZEW Centre for Economic Research reported Eurozone economic sentiment dropped to a 15-month low of 10.6 in March from 13.6 a month earlier, above forecasts for a reading of 8.2.

German private sector activity grew at a slightly faster pace than expected in March, Markit reported that its seasonally adjusted Flash Germany Composite Output Index, which measures the combined output of both the manufacturing and service sectors held steady 54.1 in March, unchanged from the prior month and above forecasts for 53.9. The preliminary services purchasing managers’ index inched up to a seasonally adjusted 55.5 in March, forecasts were for the index to dip to 55.0. The preliminary German manufacturing purchasing managers’ index fell to a seasonally adjusted 50.4 this month from a final reading of 50.5 in February, missing forecasts for 50.8. German business confidence rose in March, rebounding from a 14-month low in February, the Ifo reported that its Business Climate Index rose to a seasonally adjusted 106.7 this month from a reading of 105.7 in February, above forecasts for 106.0. The Current Assessment Index increased to 113.8 in February ahead of forecasts for 112.6. The Business Expectations Index improved to 100.0 this month, compared to forecasts for a reading of 99.5. German economic sentiment rebounded in March, the ZEW Centre for Economic Research reported that its index of German economic sentiment rose to 4.3 this month from February’s reading of 1.0. Forecasts were for the index to rise to 5.0 in March. The Current Conditions Index fell to 50.7 this month from 52.3 in February, compared to forecasts for an increase to 53.0.

French private sector activity grew at the fastest pace in five months in March, Markit reported that its seasonally adjusted Flash France Composite Output Index rose from 49.3 in February to 51.1 in March, beating forecasts for 49.6. The preliminary services purchasing managers’ index improved to a seasonally adjusted 51.2 this month. The reading came in above forecasts for 49.5. The French manufacturing purchasing managers’ index declined to a seasonally adjusted 49.6 this month, missing forecasts for 50.2.

Consumer price inflation in the UK remained unchanged in February the UK Office for National Statistics reported the rate of consumer price inflation rose by a seasonally adjusted 0.3% last month, below forecasts for an increase of 0.4%. Month-over-month, consumer price inflation edged up 0.2% in February, below forecasts for an advance of 0.4%. Core CPI costs rose at a seasonally adjusted rate of 1.2% last month, in line with forecasts and unchanged from January. The retail price index increased 1.3% in February, in line with forecasts for it to remain stable with January’s reading of 1.3%. The data also showed that the house price index rose 7.9% in January, above forecasts for a gain of 6.9%.

Japan’s manufacturing activity contracted in March for the first time in almost a year, the Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index fell to 49.1 in March on a seasonally adjusted basis from a final 50.1 in February.

Forex Round Up MarketsWorld Bars

The Dollar was moderately lower against the other major currencies on Tuesday, as investors were cautious after a series of terrorist explosions in Brussels. The USD/JPY was down 0.17% at ¥111.76.

Safe-haven demand strengthened after a series of explosions in Brussels on Tuesday morning, with two blasts at the airport and another at a metro station in the heart of the EU quarter an hour later. The Euro regained some ground after the ZEW Centre for Economic Research reported that its index of German economic sentiment rose to 4.3 this month from February’s reading of 1.0. Forecasts were for the index to rise to 5.0 in March. The index of Eurozone economic sentiment dropped to a 15-month low of 10.6 in March from 13.6 a month earlier, above forecasts for a reading of 8.2. The German research institute Ifo said its Business Climate Index rose to 106.7 this month from a reading of 105.7 in February, above forecasts for 106.0. Markit reported that its Flash Eurozone Composite Output Index rose from 53.0 in February to 53.7 in March, above forecasts for 53.0. German manufacturing PMI edged down to 50.4 in March from 50.5 the previous month, while the services PMI rose to 55.5 this month from 55.3 in February. In France, the manufacturing PMI fell to 49.6 in March from 50.2 the previous month, while the services PMI rose to 51.2 from 49.2. The EUR/USD was down 0.12% at £1.1229.

The UK Office for National Statistics reported that the rate of consumer price inflation rose by 0.3% last month, below forecasts for an increase of 0.4%. Month-over-month, consumer prices edged up 0.2% in February. Core CPI rose by 1.2% last month, in line with forecasts and unchanged from January. Public sector net borrowing in the UK rose by £6.49 billion in February, disappointing expectations for an increase of £5.25 billion. The GBP/USD was down 1.03% at $1.4223.

The Australian dollar was stronger with the AUD/USD up 0.70% at $0.7632 and the NZD/USD held steady at $0.6762. The USD/CAD was down 0.38% at CAD$1.3049. The US Dollar Index was up 0.14% at 95.53.

Commodities News
Commodity Round Up MarketsWorld Bars

Gold prices ended modestly higher on Tuesday and near the middle of the day’s trading range Tuesday, on safe-haven buying after terrorist strikes in Brussels. April gold was up $3.40 at $1,247.60 per ounce. May silver was up $0.018 at $15.865 per ounce.

Oil futures rallied off their lows on Tuesday paring most of their losses by the settlement as the market turned much of their attention away from the terror attacks in Belgium. Oil found some support from expectations that data may show a decline in US crude production and that major oil producers will make a decision next month that may help slow global output. May West Texas Intermediate crude was down $0.07 settling at $41.45 per barrel, after trading as low as $40.77. May Brent crude added $0.25 to settle at $41.78 per barrel.

The MarketsWorld Overview MarketsWorld Bars
Crude oil stocks in the US increased last week to reach record highs for a fifth continuous week, Inventories increased 1.3 million barrels considerably lower than the 3.4 million-barrel increase that had been forecast. Inventories data is forecast to show an increase of 3.0 million barrels in this release. This may make the Dollar worth monitoring for Binary Options trading.

 

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