(menafn – ecpulse)
With the start of another session this week, markets are volatile and fluctuating heavily within a narrow range due to the low volumes seen, where most European and Asian markets are closed for Labor Day, excluding the United Kingdom which will release manufacturing data for the month of April.
Pessimism hit the Asian session today after the downbeat performance of the Chinese manufacturing sector, where the manufacturing sector improved in April in a slower than expected pace to 53.5 from the previous of 53.1 recorded in March, the thing that reflects the impact of the renewed debt crisis on Chinese growth.
Moreover, the Reserve Bank of Australia (RBA) unexpectedly reduced the benchmark interest rate to 3.75% from the previous of 4.25%, more than the expected cut of 25 bp, where the bank acts in favor of growth rather than inflation most probably due to the escalating debt crisis in Europe, which keeps on forcing downside pressures on the global growth and pace of recovery.
Today the focus in Europe will be on the royal economy especially with the absence of major economies from the euro-area region, including Germany, France, Italy and Spain. The United Kingdom will release manufacturing data for the month of April, where the manufacturing sector is expected to slow slightly in the month, forcing pressures on the sterling pound to extend the downside movement seen yesterday.
Other factors that might affect the sentiment during the European session are the results of British major companies, where Imperial Tobacco Group, Lloyds Banking Group, BP and Reckitt Benckiser Group will release their financial results for the first quarter of 2012, which might affect FTSE 100, where better than expected profits will push the index to the upside, while worse than projected profit might send FTSE 100 south.
Markets are expected to remain volatile awaiting New York Session, especially with closely watched ISM manufacturing index, which is to be released today, with expectations the manufacturing sector in the world's largest economy expanded in April unlike the Chinese, the euro area and German sectors.