Equity markets on both sides of the Atlantic tracked the Asian session lower today as a lack of economic data left investors mulling over the weaker than expected Chinese and Japanese trade balance data. After a sluggish start to the day, European equities gained some support in anticipation of a stronger start on Wall Street in the hopes that investor sentiment was still buoyant after Friday’s better than expected non-farm payroll data. However, a weaker open for both the DJIA and S&P 500, which came off a record high, quickly saw the small gains that had built up in London’s blue chip index erode as the index remained on track to end the day 0.2% lower. France’s CAC gained as much as 1.15% before selling off later in the day as it struggled to hold on to the open while Germany’s DAX spent a large part of the day under pressure.
The weaker Chinese trade data hit commodities particularly hard, with both crude benchmarks erasing gains accrued late last week on the bearish Chinese demand outlook. Three month copper prices opened significantly lower after Friday’s sell-off as prices touched levels last seen in 2010. Prices have been trading within a wide range between $6,608-$6,746/tonne after opening 1.27% lower this morning as indecision dominates the session. Spot gold prices were also hit by the pessimistic demand outlook as the yellow metal struggled to regain ground lost towards the end of last week, resistant to moves above $1,345/oz as market participants reassessed the Asian demand outlook for physical bullion.