Global equity markets came under renewed pressure today as investors remain cautious ahead of tomorrow’s US non-farm payroll report and an imminent deadline regarding Greece’s repayments to the IMF. In Europe, the CAC, DAX and IBEX fluctuated strongly giving mixed signals, while the London equity benchmark index retreated over 0.6%, at the time of writing.
In the US, the Dow Jones index declined over 0.4%, while the S&P 500 and NASDAQ continued the downtrend. On the macroeconomic front, we received fairly robust US employment data ahead of the key non-farm payroll report tomorrow. Challenger layoffs fell unexpectedly by 22.5% in May compared to a rise of 52.8% in April, while initial jobless claims rose 276K for the week ending 30th May versus estimates of 278K. The USD index initially came under pressure this morning and reached a low at 94.65 against a basket of currencies but rebounded since then and hovered around 94.40 following the release of employment indicators.
In the UK, the Bank of England kept interest rates unchanged as expected, while the Halifax survey house prices fell slightly by 0.1% in May compared to a 1.6% rise in April. Sterling rebounded strongly and tested a high at 1.5441 against the USD. In addition, GBPEUR recovered and edged higher today towards 1.37 following six consecutive sessions of sharp losses.
All eyes are on the key US non-farm payroll report tomorrow and the crucial OPEC meeting in Vienna. Crude oil prices remain in negative territory today, retreating over 2.3% as investors would like to lock in any recent gains ahead of OPEC’s decisions. We do not expect any big surprises from the meeting’s outcome as it looks more certain that OPEC will retain its current output targets. However, it will be interesting to watch OPEC’s oil ministers’ comments regarding the current oil market conditions and prospects.