- European indices set to end bad week near the lows
- Spain follows Italy in providing a source of political uncertainty
- Oil also slides with Saudi minister warning of growing supply
- USD set for another week of gains; mixed durable goods data
It’s been a challenging week for European stocks with some fairly sizable declines seen. The ongoing political concerns surrounding Italy remain a source of concern and the DE30 has seen a bright start to today’s session fade with a large red candle currently displayed on a weekly chart.
Further political worries have surfaced today in Spain, with the SPA35 dropping sharply. The market has swooned on calls from the 2 opposition parties for a snap election, and even though PM Rajoy has said that he will resist these calls, the market has had a large down day. The Euro has also seen some selling on the news with the EURUSD hitting a new low below the 1.17 handle.
There’s been a swift drop lower in the oil price today with a wave of selling hit the market. Today’s comments from Khalid Al-Falih, the Saudi Oil minister, have got more than a hint of suggestion that the current restriction of supply may be phased out in the not too distant future. The price of Oil has moved down by over 2% and the market trades below the $77 handle on the European close.
The latest consumer spending data from the US has sent some fairly mixed signals on the sector, with the a pretty large drop in the headline negated by a better core reading. The durable goods orders m/m for April fell to -1.7% from 2.7% previously (revised higher from 2.6%), further than the expected -1.3%. However, the core reading often holds more weight on these data points and a pleasing 0.9% increase, compared to +0.5% forecast has offset the negativity from the headline print.
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