- Choppy trading remains the dominant theme
- Oil around its six week low
- German business confidence craters
Stocks slipped in early trading on Thursday following a choppy session on Wall Street as traders weighed comments from Federal Reserve chair Jay Powell. Major indices notched declines of around 1 per cent in the first hour of trading with recession fears front and centre. Oil edged up a tad off key support levels but remains close to yesterday’s six-week low. Copper plunged to a 16-month low on broad recession fears and particularly worries about a China slowdown due to Covid lockdowns. And Boris Johnson faces a big test with two by-elections in Yorkshire and Devon where the Tories are set for an absolute hammering.
European stocks and the euro did not react well to yet more concerning economic data from the Eurozone. The latest flash composite PMI for “showed a sharp loss of momentum in the German economy at the end of the second quarter. Falling exports acted as a drag, while there were also signs of domestic demand coming under pressure from heightened economic uncertainty and sustained strong inflation”. And German businesses reported their lowest confidence towards future activity for over two years. Momentum lost just as the ECB starts to tighten policy... can they continue to hike rates with the EZ economy on fire around them?