Rising around 50 points, but still lurking just below 19900, the Dow Jones still couldn’t recapture the momentum it lost after the Fed revealed its first rate hike in a year last week. A weaker than forecast flash services PMI (at 53.4 against the 55.2 forecast and the 54.6 last month) didn’t help; neither did the dollar’s performance against the pound, the greenback rising 0.9% against its British rival after Deutsche Bank noted that trends seem to be shifting in favour of ‘weaker sterling’.
Those comments also took the pound lower against the euro, where it lost 0.9% to take it the currency back below €1.185. This ended up helping the FTSE, which crept around 20 points above 7000, though the reddish hue of its banking stocks (largely thanks to the increasing problems over at Monte dei Paschi) prevented the UK index from getting too excited this Monday.
The DAX and CAC struggled with the issues as the FTSE this afternoon, the near 10% fall from Italy’s oldest bank sparking a wave of jitters through the rest of the sector. The news that Atlante, the private equity bailout fund, was having second thoughts about a €1.5 billion purchase of bad loans from Monte dei Paschi caused the bank’s dismal day to get even worse, dragging with it the rest of its peers.