Though the Dow Jones avoided the precipitous plunge promised by the index’s futures, that ended up meaning very little to the European indices.
Given that at one point the index was nearing 25100, the fact that it is flat around the 25500 mark is something of a coup for the Dow Jones. A stellar ISM services PMI likely helped, with the figure coming in far higher than forecast at 59.9, against the 56.5 expected and the 55.9 seen in December.
The dollar, meanwhile, got revenge on the pound for its last few months of misery. Cable dropped 0.9%, informed not only by the new wave of hawkishness to hit the markets and that strong ISM non-manufacturing PMI, but the UK’s own 17 month low-striking services reading and the Tories’ latest round of Brexit in-fighting. Sterling also struggled against the euro, falling 0.6% to €1.128, its worst price against the single currency in 2 and a half weeks.
Unusually the FTSE could find no joy in the pound’s problems. The UK index was too busy dealing with the market-wide fear that a further rise in interest rates is on its way, sliding 1.1% as the day went on. The Eurozone indices, meanwhile, were a mixed bag. The DAX managed to reduce its losses to just 0.4%, following the Dow’s lead, but with the French CAC and Spanish IBEX down 1.1% and 1.2% respectively.