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Pre-Market Report: Mixed Global Markets, Strong Market Sentiment

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Part 2
Pre-Market Report: Mixed Global Markets, Strong Market Sentiment PART 2 OF 4

European Markets Are Weak amid the Crisis in Catalonia

United Kingdom

After gaining for five consecutive trading days, the United Kingdom’s FTSE 100 Index lost momentum on Wednesday. It opened lower on October 4 and traded with weakness in the morning session.

European Markets Are Weak amid the Crisis in Catalonia

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Market sentiment

President Trump’s tax reform proposal improved the sentiment in European markets last week. Carrying the strength forward, the FTSE 100 Index opened higher this week and rose to three-week high price levels. The weaker-than-expected manufacturing PMI and construction PMI weakened the pound and supported the FTSE 100 Index. The market’s risk appetite decreased on Wednesday ahead of Prime Minister Theresa May’s party conference speech today. The market is also looking forward to speeches from Bank of England MPC members McCafferty and Haldane on October 5.

On the economic data front, according to the Chartered Institute of Purchasing and Supply, the United Kingdom’s services PMI (purchasing managers’ index) rose to 53.6. It was higher than the market’s expected reading of 53.2. At 6:40 AM EST, the FTSE 100 Index is trading at 7,462.50—a fall of 0.08%. The iShares MSCI United Kingdom (EWU) rose 0.26% on October 3.

Germany

Following the five-day rising streak, Germany’s DAX Index opened higher on Wednesday. Despite the strong global outlook, the DAX Index is weak in the morning session due to the crisis in Catalonia. According to Markit Economics, Germany’s services PMI remained unchanged at 55.6 in September, while Germany’s composite PMI fell to 57.7. At 6:45 PM EST, the DAX Index was trading at 12,901.50—a fall of 0.02%. On October 3, the iShares MSCI Germany ETF (EWG) rose ~0.37%.

France

After rising for six consecutive trading days, France’s CAC 40 Index pulled back on Wednesday. The CAC 40 Index opened the day on a weaker note amid the crisis in Catalonia and traded with weakness in the morning session. The speculation of a unilateral declaration of independence in Catalonia is weighing on the European markets. At 6:50 AM EST, the index was trading at 5,347.50—a fall of 0.37%. The iShares MSCI France (EWQ) rose 0.39% on October 3.

In the next part, we’ll discuss how US markets performed on Tuesday.

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