After a brief break for the bank holiday and following Leicester City’s Premier League title victory, the markets opened on Tuesday morning weighed down by miners and knocked by weaker than expected manufacturing data. To expand on the latter, April’s manufacturing PMI data was released this morning coming in at a disappointing 49.2 from 50.7 in March. A figure below 50 indicates contraction and it is the first time since March 2013 that it has done so. The PMI will have certainly been affected by the upcoming EU referendum vote on top of the already strained global economy (service sector PMI due Thursday).
The Japanese yen continued to be spurred on by risk aversion from investors. Despite the Japanese market closing for the rest of the week today, the USD/JPY rate currently sits just above 106 although it did sit below this mark earlier in the day. Despite a good start though many Asian indices let most of their early gains go. Australia surprisingly joined the growing list of central banks adding further stimulus, with the move cutting interest rates to record lows of 1.75%.
There was a raft of further disappointing results from European financials, Commerzbank, UBS and HSBC all saw shares fall following poor Q1 results. On the FTSE 100 the biggest faller for the day was Anglo, with shares closing over 12% down. Weaker Chinese manufacturing data was to blame, yet Anglo shares have typically been more volatile than fellow mining firms which explains the significant drop. Rounding up, the FTSE 100 closed the day -0.82% and as we write American markets have followed Asia and Europe’s lead, the S&P 500 currently sits -1.22% with the Dow down 1.15% also.