LONDON — European assets were flat in early trade yesterday as investors trod cautiously before German and British data expected to add weight to signs the continent’s economy is reviving.
The German IFO survey is likely to show business morale picked up for a third consecutive month in July, while the first reading for Britain’s second quarter GDP is tipped to show growth to have doubled from the first quarter.
The euro edged up 0,1% to about $1,3214 while Europe’s broad FTSE Eurofirst 300 index .FTEU3 was little changed at the open and Bund futures dipped slightly.
Better reports on business activity for the United States and Europe today had encouraged investors to reduce holdings of safe US and German government debt and supported share prices — despite further evidence of a slowdown in China.
European stock market investors were also closely watching company results and outlooks before deciding on whether to push prices higher.
The earnings season has kicked off in earnest in major financial centres, keeping markets in check as investors gauge the business outlooks amid challenging global growth prospects.
So far in Europe the picture has been mixed.
“I’m looking for signals for when fundamentals will begin to take centre stage again, but not seeing any as yet,” Ioan Smith, managing director of KCG Europe, said.
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Earlier MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0,3%, having posted a seven-week closing high a day earlier.
The US S&P 500 index .SPX shed 0,4%, a modest move and yet still the biggest fall in almost a month.
The dollar struggled to extend gains after snapping a three-day slide, while gold found a tentative footing following a 2% fall.
Commodities were mostly under pressure given ongoing worries about a slowdown in China.
Copper fell 0,4% to $7,023 a tonne and US crude slipped 0,4% to $105 a barrel.
“We think that China is going to continue to be under a bit of pressure and that could weigh on the base metals market a bit more,” said Natalie Rampono, commodity strategist at Australia and New Zealand Banking Group. — Reuters
