Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded with modest gains. Whereas global investors are mainly focused on the future of interest rates in the US and given its recent reactions to Chinese economic data is expected that the positive signals emanating from the Chinese economy have a limited impact on European markets. Still, it is not be excluded intraday recovery of the mining and oil sectors which have suffered sharp losses yesterday. The banking sector may be highlighted as yesterday, after some German media have advance that Deutsche Bank and Commerzbank were studying the possibility of a merger. This news had no official confirmation.
US markets ended with some losses. The causes of yesterday’s decline were essentially two: the reading of the ADP report and falling oil prices. The ADP report by Automatic Data Processing in collaboration with Moody’s, said that the private sector generated 177,000 jobs in August, roughly in line with the estimated. All jobs were created in the services sector, and the contribution of small, medium and large companies substantially identical. Although the correlation between observations of this indicator and the employment report is not high, many economists use it to adjust its estimates for the latter indicator. Investors use the ADP report as a kind of barometer employment report and interpreted yesterday read as an indication that the latter will signal a dynamic labor market. According to the most recent statements by members of the Fed’s, employment report, to be published on Friday, could be a crucial variable in the Central Bank’s decision-making process in relation to a rise in benchmark rates already in September. Crude oil extended its recent fall after the Department of Energy have revealed a greater accumulation of oil reserves than anticipated accompanied by a smaller decrease than the estimated gas reserves. Oil suffered close losses to 3% and its weakness has spread to other raw materials, which affected the oil and mining sectors. The month of September is full of events that can offer some challenges to investors. The first is the employment report on Friday, followed by the meeting of the ECB (8th), meetings of the Fed and the Bank of Japan (21), the first debate between Hillary Clinton and Donald Trump (26 ) and the OPEC meeting (26-28).
Asian shares closed without a definite trend. While some markets reacted negatively to the Wall Street closing, others ended the session with gains, justified by good economic data in China. The PMI index, developed by the Chinese government indicated that manufacturing activity improved in the country, rising from 49.9 to 50.4, beating economists’ forecasts of 49.9. With this reading, the manufacturing activity in the country went from a contraction phase to an expansion phase. The PMI index Caixin, calculated by Markit Economics, remained at 50.0, below the 50.6 observed in July. The main difference between these two rates is related to the fact that the first collect a larger sample of companies, mostly public or large semi-public capital. The second focuses more on small and medium enterprises of mostly private capital.