Global equity markets extended losses on Thursday amid QE tapering concerns

Thursday, December 05, 2013

European equity markets gave back earlier gains and slid lower on Thursday as robust US economic data confirmed worries about possible QE tapering earlier than investors have initially expected. CAC, DAX and IBEX retreated between 0.6% and 1.56%, while the USD index slid lower toward 80.0 area.

London equity market ended lower for fifth consecutive session, the longest losing streak since March 2013. In the meantime, Chancellor George Osborne reported the British economy was on track to grow by 1.4% in 2013, more than double his initial forecast in March, and 2.4% in 2014 up from the previous estimate of 1.8%. The Bank of England left its interest rates unchanged, as expected.

In the US, the economy grew by 3.6% in Q3 2014, beating expectations of a 3.0% growth, spreading euphoria in the markets amid expectations that the US non-farm payroll data tomorrow could also beat analysts’ estimates.

The euro has remained fairly strong, holding above 1.365 against the dollar after the European Central Bank kept interest rates unchanged, as expected.

Tomorrow, the release of the crucial US employment data will give the markets further direction. Focus will switch to the US non-farm payroll figures as well as unemployment rate, while the University of Michigan/ Thomson Reuters survey will provide further signs regarding the US economic conditions and prospects.

 

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