European equity markets, currently trading near the highest level in five months had been expected to continue the positive trend- and open higher amid signs of possible easing in China. On Wednesday Chinese Premier Wen Jiabao was quoted as saying that easing inflation was giving the government more leeway to utilize monetary policy in promoting growth, indicating that China may act to boost economic growth. Notwithstanding, investors on Thursday seem to be in “Holiday Mode” and with volumes so light, regional indexes just drifted lower.
At mid-day the benchmark Stoxx 600 index was down 0.2%. The U.K.'s FTSE 100 was flat, Germany's DAX was 0.2% lower and France's CAC-40 was off 0.2%. Outside Europe's core, Spain's IBEX-35 was flat and Italy's FTSE MIB was down 0.1%, but Greece's ASE Composite was up 0.7%.
Meanwhile, southern European bond markets were fairly calm again. Spain's 10-year government bond yield was up 0.02% at 6.65%, while the corresponding Italian yield was up 0.07% at 5.82%.
Later on Thursday investors will watch for the release of U.S. initial jobless claims and housing data, while the Philadelphia Fed survey for August will be closely watched after Wednesday's disappointing Empire State manufacturing data. As expectations for further quantitative easing by the Federal Reserve are scaled back, market participants will be keen to see how Thursday's data fare.
In foreign exchanges, the euro was down against the dollar. The single currency was fetching $1.2272 from $1.2290 late Wednesday in New York. The dollar was at ¥79.22 from ¥78.99.
September Nymex crude oil futures were down 13 cents at $94.20 per barrel and the Brent oil contract was up seven cents at $114.38. Spot gold was at $1,602.00, down $2.70, while the September Bund contract was down five ticks at 141.36.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group. Valletta Fund Management, TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Freephone: 80072344. email: firstname.lastname@example.org Internet address: www.vfm.com.mt. Valletta Fund Management Limited is licensed by the MFSA.