European equity markets reversed yesterday’s gains and slid lower in today’s trading session as risk appetite was limited. We received fairly positive macroeconomic indicators from the US, China and Eurozone, but the data failed to provide any upside momentum to equity and commodity markets.
The euro rebounded and rallied strongly above 1.362 against the USD, supported by robust Eurozone inflation and unemployment figures. The main focus has switched to the ECB meeting on Thursday regarding their much-anticipated interest rate decision.
In the US, factory orders rose by 0.7% in April beating expectations of a 0.5% rise and durable goods also increased by 0.6% in the same period. The IBD Economic Optimism Index rose to 47.7 in June compared to 45.8 in May, verifying signs of improvement in the US economy.
Base metal prices traded fairly mixed today. Aluminium, Lead and Zinc edged higher, while Copper and Nickel reversed from yesterday’s gains and posted fresh losses with Copper trading below the $6900 area. Mining stocks were also under pressure in London; Fresnillo, Randgold and Anglo American retreated more than 1.5%, while Glencore, BHP Billiton and Antofagasta declined between 0.75% and 1%.
On the upside, Wolseley climbed more than 1.6% today after reporting a 5.1% increase in revenues of Q3 2013 and the company announced it expected sales to surge near 4% over the next six months.
Tomorrow, investors’ attention will turn to the release of the Eurozone’s GDP revised data for Q1 2014 as well as Markit Services PMI from the UK and Eurozone. In the US, the main attention will turn to the ADP national employment figures and labour costs, which could provide an insight ahead of the US non-farm payroll figures on Friday.