European equity markets consolidated in today’s session as fairly mixed economic indicators failed to provide a clear direction. The DAX, IBEX and the London benchmark index edged slightly higher to finish the session on the positive side, while the CAC index retreated by 0.37%.
The euro came under renewed pressure against the USD after reaching a high at 1.37 earlier this week. Sterling held strongly above 1.7 against the dollar, reaching a 6-year high, verifying signs of a strong UK economy especially following the recent robust PMI manufacturing data. It seems that the Bank of England is likely to increase interest rates sooner rather than later, following the recent solid economic data.
On the macroeconomic front, US ADP national employment data showed companies added 281,000 employees to payrolls in June, beating analysts’ expectations of 200,000. However, factory orders fell unexpectedly by 0.5% in May and durable goods also declined sharply by 0.9% during the same period.
In the UK, Nationwide house prices rose by 11.8% y/y in June beating expectations of a 11.2% rise, while Markit/CIPS construction PMI climbed strongly to 62.6 in June from a previous 59.79 in May.
Precious metals continue their strong uptrend as Gold edged higher to retest 1,330 points, while Silver rallied above $21. LME copper was also higher, trading above 7,100 and aluminium climbed more than 2%.
As the US markets will be closed on Friday for the Independence Day, trading volumes could be muted. However, the release of key US non-farm payroll data could provide some momentum to equities and commodities.