Global equity indices pull back on jobless claims and retail sales data

Thursday, June 12, 2014

Markets around the world flipped between gains and losses throughout the trading session as long anticipated US macro data showed weekly initial jobless claims rose 4,000 from the previous week's revised figure. The majority of global benchmark equity indices, which had pushed higher at the start of the week during trading sessions that were largely devoid of economic data, slipped on the release of the bearish data. London’s blue chip index started the session in negative territory before pushing higher during the afternoon, however, gains have been limited and the index was trading either side of the open towards the end of the session.

The DAX and CAC experienced similar selling activity throughout the day as investors took stock of the first notable pieces of economic data this week. Today’s release of increasing initial jobless claims and weaker retail sales growth in May, which came in at 0.3% m/m against expectations of 0.6%, saw benchmark indices on Wall Street open lower, with both the S&P 500 and DJIA trailing between 0.1%-0.2% lower.

Crude oil prices rallied higher today on flaring violence in Iraq which saw front month Brent prices rally as much as 2% higher towards a four month high around $112.30/bbl. Concerns over crude oil supply have added to the risk premium substantially in recent sessions with today’s gains sparked by the news that an al-Qaeda splinter group had captured Iraq’s second largest city, Mosul. A larger than anticipated drawdown in DOE crude oil inventories also shored up support for front month WTI futures. Investors will be closely watching the situation in Iraq, which could see additional risk premium in the coming sessions if the situation deteriorates.  

SPX pulls back of recent highs on bearish macro data

SPX Index SP 500 Index 2014 06 12 16 15 41

Front month Brent futures rally on unrest in Iraq

CO1 Comdty Generic 1St CO Fut 2014 06 12 14 50 29

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