European indexes trade lower
European markets (DBEU) were trading negatively today as the German business climate fell short of expectations. The upcoming monetary policies from the United States and Japan also contributed to investors’ caution.
The European market (HEDJ) carried over negativity from the Asian markets. The SPDR Euro Stoxx 50 ETF (FEZ) fell 0.75% as of 9:00 AM EST today. The German DAX and the French CAC 40 fell 0.79% and 0.61%, respectively.
Why the pound rose 0.6%?
The British pound to US dollar currency pair, which directly relates to the pound, saw an uptick today. The rise in the currency pair was primarily due to US President Barack Obama’s views on the Brexit referendum. He says that if friends of the United States are in an organization that enhances their power, influence and economy, then he would prefer them to stay in that organization. This announcement improved investor sentiment about Britain staying in the European Union. The currency pair reflected a similar sentiment, rising 0.6% to 1.45 at 9:00 AM today.
German business confidence weakens
The German Ifo business climate for April was published on a weak note today. The business climate fell to 106.6, against forecasts of 107.1. The Ifo current conditions and expectations were also below forecasts, at 113.2 and 100.4, respectively. The report attributed the fall in business climate to concerns in China, Germany’s third-largest trading partner. But the stabilizing Chinese economy in recent weeks is expected to result in a better business climate.