CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Choppy trading due to Strong Chinese data and Moody downgrade for German

Article By: ,  Senior Market Analyst
July 24, 2012 12:30 PM

European markets struggled to find a direction in early trading on Tuesday, as positive manufacturing data from China supported a very much risk on approach whilst on the other hand Moody’s lowered its outlook on powerhouse Germany to negative due to increasing uncertainties from the euro zone debt crisis.

Across Europe the CAC and the DAX by mid morning are trading 0.1% lower whilst Italy and Spain’s main Index have shed over 1.5%. The FTSE is currently trading flat at 5537, stabilising after shedding over 2% on Monday as it fell to its lowest level in three weeks.

For some time now, concerns for the Eurozone had been bubbling away in the background as earnings season and Chinese growth data took centre stage. However this week has seen a marked change in market sentiment resulting in the yield on the Spanish 10-year bond staying elevated above 7%, even hitting 7.55% yesterday. Market confidence is faltering and traders are acting accordingly by removing riskier assets from their portfolio.

Furthermore the fact that Moody’s Investor Service rating agency lowered the outlook for Germany shows that even they are not immune from the growing doubts surrounding Europe. With the possibility of the Greek exit from the Eurozone still a very real scenario and the concerns of the effect that this may have on Spain and Italy, or even if it doesn’t – the increased support that Spain and Italy will require will see the burden fall heavily on the stronger European countries.

UK stocks were mostly higher as miners were on the rise following news that China’s manufacturing activity in July is at the strongest level for five months. HSBC’s China Manufacturing PMI for July rose to 49.5 on a 100 point scale, however a reading below 50 still indicates a contraction implying that demand remains weak and employment under pressure. Regardless the market was pleased to see an improvement from Junes reading of 48.2 and as such miners dominated the top gainers in the FTSE.

Elsewhere on the FTSE Imperial Tobacco said its performance had been in line with expectations, with nine month tobacco net revenues rising 3%. Hedge Fund Man Group revealed another round of cost cuts and also weaker revenue from falling assets under management as nervous client withdrew their funds.

A lack of domestic economic data today indicates focus will be on the US House Price Index released this afternoon.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website 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.

© City Index 2024