Markets drift as questions hang over global economy

LONDON – Summer doldrums and questions about the direction of the global economy put financial markets in a drifting mode yesterday with the dollar mixed, European shares weak and bonds flat.

Wall Street looked set for a higher start, but investors remained uncertain about the extent of an expected slowdown in the world economy and its impact on financial markets. “Everyone is waiting for various things, but no one is quite sure what,” said Nigel Cobby, managing director of European equities at J.P. Morgan.The dollar was among the main movers on a quiet trading day, generally weakened by a series of US reports on Friday that cut back expectations of interest rate hikes.”Economic numbers have been weaker than the market had anticipated and the environment for rapid US rate hikes has been scaled down,” said Mark McFarland, currency strategist at UBS in London.”Investment flows supporting the dollar have diminished in size and the potential for US growth is weaker.”European shares fell to near two-month lows with a thin corporate menu and dwindling investor appetite for new issues.The FTSE Eurotop 300 index was down 0,27 per cent and the DJ Euro STOXX was off 0,5 per cent.The pan-European 300 share index has fallen 4 percent in less than a month with investors worrying that growth in corporate earnings may have peaked as interest rates head higher.”Overall, the earnings trend is still okay but growth is expected to moderate from here on,” said Bert Jansen, European strategist at Exane BNP Paribas in Paris.”This is clearly one of the worries and the reason why the market is not making any headway,” he said.-Nampa-Reuters”Everyone is waiting for various things, but no one is quite sure what,” said Nigel Cobby, managing director of European equities at J.P. Morgan.The dollar was among the main movers on a quiet trading day, generally weakened by a series of US reports on Friday that cut back expectations of interest rate hikes.”Economic numbers have been weaker than the market had anticipated and the environment for rapid US rate hikes has been scaled down,” said Mark McFarland, currency strategist at UBS in London.”Investment flows supporting the dollar have diminished in size and the potential for US growth is weaker.”European shares fell to near two-month lows with a thin corporate menu and dwindling investor appetite for new issues.The FTSE Eurotop 300 index was down 0,27 per cent and the DJ Euro STOXX was off 0,5 per cent.The pan-European 300 share index has fallen 4 percent in less than a month with investors worrying that growth in corporate earnings may have peaked as interest rates head higher.”Overall, the earnings trend is still okay but growth is expected to moderate from here on,” said Bert Jansen, European strategist at Exane BNP Paribas in Paris.”This is clearly one of the worries and the reason why the market is not making any headway,” he said.-Nampa-Reuters