Analyzing European Markets Early on January 24

The United Kingdom’s FTSE 100 Index pulled back last week and broke the six-week gaining streak. The FTSE 100 Index started this week on a weaker note by pulling back on Monday. After a brief recovery on Tuesday, the FTSE 100 Index opened lower on Wednesday and traded with weakness below the opening prices in the early hours.

Following a mixed performance by Asian markets, the FTSE 100 Index started today on a weaker note. Weakness in Sage Group amid the release of a trading update weighed on the FTSE 100 Index in the morning session. On the economic data front, according to the Office for National Statistics, the U.K. Average Earnings Index +Bonus recorded 2.5% in November, which is in line with the market forecast. The U.K. Claimant Count Change surged to 8,600 in December—higher than the forecast of 5,400.

At 4:35 AM EST today, the FTSE 100 Index was trading at 7,688.00—a drop of 0.57%. The iShares MSCI United Kingdom (EWU) rose 0.11% on January 23.

Germany’s DAX Index regained strength last week and surged to ten-week high price levels. Carrying forward the strength, the DAX Index started the week stronger and surged to fresh record high price levels on Tuesday. The market opened higher on Wednesday but traded with mixed sentiment at elevated levels in the morning session. On the economic data front, according to Markit Economics, Germany’s manufacturing PMI (purchasing managers’ index) declined to 61.2 in January—below the forecast of 63.2. Germany’s services PMI surged to 57—higher than the expected reading of 55.6.

At 4:40 AM EST on January 24, the DAX Index was trading at 13,536.50—a fall of 0.17%. The iShares MSCI Germany (EWG) rose 0.54% on January 23.

France’s CAC 40 Index remained range bound for two weeks and started this week on a stronger note. However, the upward momentum in the CAC 40 Index declined as the week progressed. After closing Tuesday with losses, the CAC 40 Index opened lower on Wednesday and traded with weakness below opening prices in the morning session. On the economic data front, according to Markit Economics, France’s manufacturing PMI declined to 58.1 in January—below the expected reading of 58.7.

At 4:45 AM EST today, the CAC 40 Index was trading at 5,522.00—a drop of 0.24%. The iShares MSCI France (EWQ) rose 0.06% on January 23.

In the next part of this series, we’ll discuss how US Treasury yields and the US dollar performed in the early hours on Wednesday.