European equity markets slid lower today as risk appetite remained limited ahead of the results of the US Federal Reserve policy meeting and ongoing uncertainty about the Scottish referendum. The CAC, DAX, IBEX and London equity benchmark retreated between 0.2% and 0.44%, while the US equity markets rebounded and posted solid gains.
On the macroeconomic front, we received fairly mixed German economic data. The ZEW economic survey showed expectations at 6.9 in September beating estimates of 5.0, but the current situation was reported fairly low at 25.4 in September compared to 44.3 in August, missing analysts’ expectations of 40.0.
In the UK, CPI inflation was reported at 0.4% m/m in August in line with estimates, while the CPI core y/y was reported at 1.9%, slightly above estimates of 1.8%.
In the UK, heavy losses in financial stocks as well as retail and utility companies offset a strong rebound in the energy sector. Banks were fairly mixed, as RBS rallied 1.33% while Standard Chartered and Lloyds finished the session at negative territory.
However, Royal Dutch Shell, BP and BG Group climbed higher between 0.7% and 0.96% due to a strong rebound in crude oil prices with Brent front month futures rallying strongly above $99 per barrel.
Precious and base metal prices rallied, partially on softer USD while investors remained cautious awaiting key decisions from the US Federal Reserve Bank tomorrow regarding a possible timeframe for an interest rate increase. Aluminium 3M climbed above 2020, while copper 3M rallied almost 2% above 6,950. Lead and zinc also rallied more than 1.65%. In precious metals, Gold retested 1,240, while silver climbed more than 0.7% eyeing the key level of 19.00.
Tomorrow, investors will be awaiting the results of the US Federal Reserve policy meeting which could provide an outlook about the US economic situation giving further direction to the USD. Furthermore, the release of the US CPI inflation data as well as NAHB housing market index should provide further indications of current conditions.