Euro pessimism was quick to seep into the markets as investors worked through the impact of a German election bombshell – a fourth term for Merkel but a far-right presence in the German parliament. The Alternative for Germany (AfD) party will be the third biggest parliamentary presence in the Bundestag.
Responding, the euro slipped -0.44% against the dollar to $1.1872 and almost the same amount against the pound to 0.8792. Matters were further depressed by a less-than-stunning reading from Germany’s IFO survey. It pointed to continuing manufacturing investment, but not by the margin hoped for (115.2 vs 116).
Mid afternoon Mario Draghi, ECB boss, testified in Brussels before the European Parliament but little that was new or insightful emerged from his lips. “Risks surrounding the euro area growth outlook are broadly balanced,” he said. “At the same time, downside risks continue to exist.” Chew on that.
The FTSE 100 closed at 7,307, down three points. Share rises were muted with Convatec, ITV and BT Group seeing +1.5% rises. In contrast Mediclinic Int and Antofagasta endured -5.1% and -3.3% falls.
- UK FTSE 100 7,307 -0.13%
- Dow 22,327.25 -0.10%
- S&P 500 2,498.22 -0.17%
- Nasdaq 6,377.74 -0.79%
- Nikkei 225 20,347.48 +0.18%
- DAX 12,618.04 +0.20%
- CAC 40 5,275.11 -0.12%
- Gold 1,296.90 -0.05%
- Oil WTI 51.40 +1.46%
Bank of England gets the debt jitters
Earlier The Bank of England fired a personal credit warning. The Bank’s Financial Policy Committee warned that UK banks could shoulder up to £30bn of losses should UK consumers hit the buffers if the economy tanked.
The committee is particularly anxious about consumer credit in its many forms – plain vanilla borrowing, car PCP loan debt plus the mounting pressure on families struggling to cope with higher inflation and barely-shifting UK wages.