European equity markets edged slightly higher in today’s session, supported by solid economic data from the US, China and Eurozone, which increased risk appetite. The CAC and DAX edged higher by 0.2%, while the London equity index finished flat.
On the macroeconomic front, German Markit Services PMI rose to 56.4 in May, beating analysts’ expectations of 54.5, while Eurozone’s Markit services PMI increased to 53.5 in May, above estimates of 53.0. However, Markit manufacturing PMI data was slightly below expectations in both France and Germany.
In the UK, the economy grew by 0.8% in Q1 2014, in-line with expectations, but sterling gave back part of the recent gains and slid lower towards 1.68 against the USD.
The euro continued to remain under pressure, retreating further against the US dollar at 1.365. The robust US economic data drove the dollar higher in today’s trading session with the USD index breaching above the 80.2 level, verifying signs of strong improvements in the US economy.
In London, robust gains in technology and mining stocks offset declines in energy and healthcare companies. Antofagasta, Fresnillo and Rio Tinto climbed higher between 1.27% and 1.95%, supported by a rebound in base metals prices. Aluminium surged more than 1.6% on the LME today to retest the 1800 area, while copper also climbed higher towards 6875, supported by robust Chinese HSBC manufacturing PMI data.
Tomorrow, market participants will be watching for the release of the German GDP data as well as Ifo business climate survey, while in the US the main focus will switch to the new home sales figures.