Weak German factory orders drag European equities lower

Tuesday, October 06, 2015

In the UK, Halifax house prices declined unexpectedly by 0.9% m/m in September, missing analysts’ expectations of a 0.1% rise. The Halifax house price 3M/year figure was reported at +8.6% in September from 9.0% in August, missing estimates of a 9.1% rise. However, the property consultancy firm Knight Frank posted robust record earnings results with y/y pre-tax profits up 19% and sales up 13%. The London equity benchmark index came under renewed pressure this morning following the tepid housing data and slid lower towards 6,250 in early trade.

Chancellor George Osborne announced that the UK government plans to sell off the last tranche of publicly owned shares in Lloyds Bank. The remaining 12% stake is expected to be sold over the next few months. Lloyds retreated over 0.7% in early trade this morning, while Standard Chartered and HSBC declined over 1.0%.

German factory orders dropped significantly by 1.8% m/m in August, versus expectations of a 0.5% rise. European equity markets reversed yesterday’s solid gains and retreated this morning as the DAX, CAC and IBEX fell between 0.50% and 0.80%. The euro continues its consolidation mode, hovering around 1.12 against the USD.

In Asia, the Nikkei index continued its strong rally and gained 1% (180 points ) towards 18,200, while the Hang Seng index reversed yesterday’s gains and slid slightly lower towards 21,800. 

Crude oil prices retreated this morning with WTI front month futures falling below $46 per barrel. Brent front month futures came under renewed pressure and slid lower to retest $49 per barrel in early trade. The release of the weekly API oil inventories report could provide further direction in the market. According to a Bloomberg survey, a build of 2.35 mln barrels in crude oil inventories is expected for the week ending 2nd October, while stocks in Cushing, Oklahoma, are estimated to have dropped by 493K during the same period.

WTI front month futures come under renew pressure

CLX5 Comdty (WTI CRUDE FUTURE  N 2015-10-06 09-11-32

 

Events for today:

0700

DE

Aug

Factory Orders

0900

UK

Sep

New Car Registrations

1330

US

Aug

Trade Balance

1500

US

Oct

IBD Sentiment

All times UK Local Time

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