European equity markets gave back yesterday’s gains and slid lower in today’s trading session as investors remained cautious following the fairly disappointing European economic data. The CAC, DAX and the London benchmark retreated sharply between 0.6% and 0.7%.
Germany’s factory orders fell sharply by 3.2% in June missing analysts’ expectations of a 0.9% rise. Germany’s Markit construction PMI was reported at 48.2 in July, below the key 50.0 level. In addition, the Eurozone’s Markit retail PMI fell to 47.6 in July from 50.0 in June, adding renewed concerns regarding European economic conditions. The big surprise came after a negative reading in Italy's GDP (-0.2% in Q2 2014) showing the country is back into recession.
The euro came under renewed pressure trading near 1.33 against the USD, weighing further on market sentiment.
The US trade deficit declined by 7% in June to $41.5 bln as imports declined particularly of refined oil products. The Dow Jones and S&P 500 rebounded and posted fresh gains as risk appetite in US equities increased while the US dollar rallied against a basket of currencies.
Gold edged higher trading above $1300/ounce following renewed tensions between Russia and Ukraine. Silver has climbed above $20.0, tracking strong gains in the yellow metal.