European equities remain under pressure

Tuesday, May 12, 2015

The Hang Seng index gave back yesterday’s gains and slid lower overnight retreating towards 27,580 (-0.50%). The Nikkei index bucked the downtrend and consolidated around 19,600, trading fairly flat. Japan’s Leading index increased to 105.5 in March compared to 104.8 in February, meeting analysts’ expectations, while the Coincident index fell slightly to 109.5 in March from 110.7 in February.

European equity markets remained under pressure this morning after posting renewed losses in early trade. The CAC, DAX, IBEX and London equity benchmark indices opened lower and extended losses between 0.60% and 1.05%, amid concerns regarding Greece’s economic stability. In addition, poor economic data from Spain weighed on market sentiment as the Spanish economy contracted by 0.3% in Q1 2015 compared to a growth of 1.2% in Q4 2014. However, the euro rebounded strongly above 1.1220 against the USD, showing signs of upside correction after three consecutive sessions of sharp losses which reached a recent low at 1.1130.   

DAX index posts renewed losses

DAX Index (Deutsche Boerse AG Ge 2015-05-12 08-47-55  

In the UK, BRC retail sales declined unexpectedly by 2.4% in April versus analysts’’ estimates of a 0.6% rise. However, the pound sterling has continued its strong uptrend against the USD after climbing for third straight session following the UK elections to retest 1.5600 against the dollar. Yesterday, the GBPEUR hit a high at 1.4004 but gave back part of the gains and slid slightly lower this morning.

GBPEUR 

GBPEUR Curncy (GBP-EUR X-RATE)   2015-05-12 08-47-14

The USD index reversed from recent gains and slid lower this morning towards 94.50 against a basket of currencies, giving back gains of three consecutive sessions. Today, the main focus will turn to the US Fed Budget statement this evening.

USD index reverses and slids lower this morning

DXY Curncy (DOLLAR INDEX SPOT)   2015-05-12 08-47-35 

Events for today:

0001

UK

Apr

BRC Retail Sales

0600

JP

Mar

Leading Index

0930

UK

Apr

Industrial & Mfg Production

1500

UK

Apr

NIESR GDP Estimate

1900

US

Apr

Fed Budget

All times UK Local Time

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