Indices hold even as PMI's slump

The markets badly needed a bit of good news and today they found it, even in the face of some unpleasant data.

Article Default

The markets badly needed a bit of good news and today they found it, even in the face of some unpleasant data.

The fact that the number of cases in Italy evened out over the last two days was taken as a signal that the country may be coming out of the worst of its viral affliction, partially because it went into a nearly full lockdown two weeks ago – the duration of incubation. Yet a meaningful analysis should also take into account that over the last week the country received a massive injection of help from other countries with batches of foreign doctors arriving to help the spread under control. Still, the spring sunshine was felt in the markets across Europe this morning with Milan’s FTSE MIB index trading up nearly 6% and the DAX up 5.8%.

Oil firms rally 13%

On the FTSE, which is up 3.7%, the focus this morning is to a large extent on oil shares as investors pin their hopes that the potential peaking of the spread in Italy and Germany may mean that some restrictions on movement in parts of Europe may start being eased soon. BP and Royal Dutch are both trading up 13%, as are hotel chains.

PMI readings close to forecasts

The Eurozone’s Purchasing Managers Index is one of the first indicators to show how badly the European economy has been hit in March, coming in at 31.4 versus 51.6 in February. Not much by way of a surprise but nevertheless uncomfortable reading. The ordered closures of all non-essential shops in Britain from today means that the economic implications will become even worse. It is too early to start calling the bottom on the decline in Europe as in a number of countries such as Poland, the Baltic states, Austria, Hungary and Croatia the virus has not yet spread on a large scale.

More from Indices

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account