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Reports UK

UK stock market commentary (August 14, 2014): German GDP and Russian convoy gone missing?

August 14, 2014, Thursday, 06:58 GMT | 02:58 EST | 11:28 IST | 13:58 SGT
Contributed by Capital Spreads

European equities are set to open flat ahead of GDP data and geopolitical risk events. Despite Mario Draghi stating that the euro zone’s recovery remained on track last week, today’s GDP data from the EU and maybe more importantly Germany, may throw that statement into disarray. Nobody is expecting a slump on the scale of Italy’s Q2 GDP last week but even a marginally weak number will cause markets to question Draghi’s earlier statement.

Also causing traders to be on their toes today is any news about the Russian convoy. Just as various media outlets ran differing stories about what Kiev and the Kremlin has agreed to; once again the lack verified reports has led to various news stories differing about its current whereabouts. Some media outlets are suggesting that the convoy is holed up on the border whilst rumours are swirling that the convoy is heading towards pro-Russian territory to cross there and bypass the Ukrainian authorities. Everything is completely unverified but is certainly adding to the cautious start this morning.

The Dow Jones traded through its 2 week high amidst a weak retail sales figure. U.S stocks rose as traders speculate that given the slowdown in purchasing, Janet Yellen would be less likely to raise rates sooner than anticipated. The Dow Jones currently trading at 16225

Bears still have the stronghold on the Euro as it falls to its lowest level since November. With all geo-political risk happening in Europe, investors are still turned off by European currencies. Additional stimulus may be on the cards for Europe if growth continues to be stagnant and inflation slows.

WTI fell over 30 cents to $97.3 a barrel. After rallying yesterday given an increase in stockpiles, rumours circulated that U.S oil demand is on the decline. With data driving sentiment at the moment whilst risk in the Middle East continues to support, investors will be keeping a keen eye on U.S figures this week.

Gold has continued to trade just below a 3 week high as uncertain retail sales figures in America increased investors uncertainty over the health of the U.S economy and recovery. It seems as though global macroeconomy and geopolitical risks continue to net each other off. Gold is currently trading at $1315.