Industrial profit for Chinese firms failed to push Europe higher
European stock markets are trading lower during the early hours of trading. Investors have congregated their momentum from the Asian trading session where all of the indices closed lower with the exception of Shanghai . The index managed to score some gains on the back of the official data which showed that the profit for the Chinese companies have been improving. This is a strong indication that perhaps recovery in China may not only need to survive on a stimulus package from the government but also strong earnings can also stem the economic recovery.
Political tension between US and Syria pressing the stocks down
Political tensions between Syria and the US is also pressing the stocks down around the globe. The political brinkmanship were fueled further due to the comments by US secretary of state John Kerry, who confirmed that Syria would be apprehended answerable for the violent act which was carried out last week. It is almost certain that some sort of confrontation could be on the cards which has alarmed the investors and therefore, we saw a negative close on Wall Street yesterday which is filtering into Asian and European trading session.
Italian stock market still sensitive to political issues
How politicians play the politics always have an impact on the markets however, it seems that the Italian stock market is not getting this message very clear. The yield on the bonds is increasing as investors are dumping the stocks. This is on the back of the news that Silvio Berlusconi party members are threating to withdraw their support for the government if the leader been expelled from the parliament. One would say that given the recent events in Italy which caused a political gridlock in the country, the stock market will not be very sensitive to this kind of threat but clearly this not the case which is reflecting in bond yield which is edging higher.
Durable goods order raised tapering questions again
Bad news is a good news phenomena which has been the theme for the global stock market failed to astound investors in the US. The final reading for US durable goods which showed a decline of 7.3% was so dreadful that investors are even more confused where they stand on the tapering agenda and started to question the recovery in Q3. However, if the tapering will have any meaningful impact due to the dreadful durable goods number is still a question given that this economic data has a tendency to be extremely volatile.
German IFO should have spill over effects
However, traders do have a positive news to digest after the economic data German IFO came in at 107.5 While the expectations were 107.1 This has certainly given more to chew to traders because the German IFO numbers are always considered as a better gauge of business confidence as compared to the German ZEW numbers. The final reading has not brought much surprise for the investors as expected manufacturing and services PMI data for the previous week came in much better than expected.
It is important that we do see the spill over effect of these numbers throughout the Europe otherwise the European recovery could be very short lived given that Germany is considered as the engine of the Eurozone.
The SEK and DKK are trending up against the dollar while the JPY, AUD are trending down against the dollar on an intra day basis.