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Spreadex Market Update

Friday, May 13, 2016 - Afternoon Market Update
Connor Campbell - Market Analyst at Spreadex

IMF and Lagarde join Carney in warning of post-Brexit shock

The FTSE maintained its half a percent drop this morning, the index now having the added weight of a dramatic decline in construction output (which fell a whopping 3.6% month-on-month) and yet another Brexit warning, this time from Christine Lagarde and the IMF. The International Monetary Fund chief arguably went even further than Mark Carney did yesterday, stating that ‘a stock market crash and steep fall in house prices’ could follow a victory for Vote Leave, whilst reminding the market that the issue has global ramifications despite the domestically-framed nature of the debate.

In contrast to the UK index the Eurozone actually managed to shrink its losses this Friday, the DAX now down a mere 0.2%, with the CAC falling 0.5%. This despite news that the region’s first quarter growth had been revised down from 0.6% to 0.5%, news that likely helped offset any goodwill gained from Germany’s better than forecast GDP reading.

Looking to the US open and the Dow Jones is expected to continue yesterday’s decline, the futures pointing to an 80 point fall after the bell. If the Dow is to avoid this drop then the afternoon’s data will have to buck the recent US trend. Sadly that looks unlikely, with retail sales set to remain in negative territory at -0.3%. The preliminary UoM consumer sentiment figure, meanwhile, is expected at 89.9, but with last month’s data already revised down to 89.0.

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The Trading Day and Week Ahead

For further information on the trading day ahead, take a look at our Financial Diary, which previews all the Economic Data due out to today and projected or previous figures.

Our Financial Diary is updated in real time as the figures are released throughout the day.

If you are unsure what different Economic Figures mean take a look at our Economic Indicators Explained guide.

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