European stocks steady after Spanish PMI, eyes on ECB; Dax up 0.07%

European stocks held steady on Wednesday, after disappointing Spanish service sector data, as investors eyed the European Central Bank's monthly policy meeting on Thursday.

Markit research group said that Spain's services purchasing managers' index fell to 55.7 in May, from a reading of 56.5 the previous month. Analysts had expected the index to tick down to 56.1 last month.During European morning trade, the DJ Euro Stoxx 50 dipped 0.04%, France’s CAC 40 eased up 0.09%, while Germany’s DAXedged up 0.07%.

European equities remained mildly supported after Eurostat said consumer price inflation in the euro zone increased by 0.5% last month, down from 0.7% in April and missing expectations for a reading of 0.7%. The rate stands well below the ECB target of near but just under 2%.

The report added to expectations that the ECB will take steps to tackle low consumer price growth, which is threatening the fragile recovery in the euro zone.

Financial stocks were broadly higher, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) added 0.12% and 0.14%, while Germany's Deutsche Bank (XETRA:DBKGn) gained 0.76%.

Among peripheral lenders, Italy's Unicredit (MILAN:CRDI) rose 0.23%, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) edged up 0.03% and 0.12% respectively.

Elsewhere, Swiss duty-free store operator Dufry (SIX:DUFNz) surged 5.35% after agreeing to buy Nuance Group for 1.55 billion Swiss francs, in order to expand in the Mediterranean.

On the downside, Volkswagen (XETRA:VOWG) tumbled 1.14% after the carmaker sold €2 billion in preferred shares to help pay for the takeover of Scania.

In London, FTSE 100 edged down 0.07%, led by National Grid (LONDON:NG), down 4.33%, after the stock had its "neutral" rating reaffirmed by JPMorgan Chase.

Mining stocks were broadly higher, on the other hand. Shares in Glencore Xstrata (LONDON:GLEN) eased up 0.04% and Rio Tinto (LONDON:RIO) climbed 0.74%, while rivals Bhp Billiton (LONDON:BLT) and Randgold Resources (LONDON:RRS) advanced 0.61% and 1.19% respectively.

Tesco (LONDON:TSCO) added to gains, up 0.64%, after the U.K.’s largest grocer reported the worst quarterly sales performance this century. Sales at U.K. stores open at least a year dropped 3.8%, the company said.

Meanwhile, financial stocks were mixed. HSBC Holdings (LONDON:HSBA) climbed 0.62% and Lloyds Banking (LONDON:LLOY) jumped 0.99%, while the Royal Bank of Scotland (LONDON:RBS) retreated 0.56% and Barclays (LONDON:BARC) tumbled 1.15%.

In the U.S., equity markets pointed to a steady open. The Dow 30 futurespointed to a 0.03% rise, S&P 500 futures signaled a 0.01% uptick, while the Nasdaq 100 futures indicated a 0.01% gain.

Later in the day, the U.S. was to release the ADP report on private sector job creation, as well as a report on trade balance.

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Forex - GBP/USD pares losses after U.K. service sector data

The pound pared losses against the U.S. dollar on Wednesday, supported by data showing that service sector activity in the U.K. slowed less than expected last month, while investors eyed a string of U.S. economic reports due later in the day.

Cable was likely to find support at 1.6697, the low of April 14 and resistance at 1.6816, the high of May 28.GBP/USD pulled away from 1.6699, the pair's lowest since May 29, to hit 1.6720 during European morning trade, still down 0.18%.

Markit research group said the U.K. services purchasing managers' index slipped to 58.6 last month, from a reading of 58.7 in April. Analysts had expected the index to fall to 58.2 in May.

The data came a day after Markit said the U.K. construction PMI ticked down to 60.0 in May, from a reading of 60.8 the previous month, compared to expectations for the index to remain unchanged.

Meanwhile, the greenback remained supported after official data on Tuesday showed that U.S. factory orders rose 0.7% in April, beating expectations for a 0.5% gain, after an upwardly revised 1.5% increase in March.

Sterling was little changed against the euro, with EUR/GBP inching down 0.01% to 0.8134.

In the euro zone, Markit said Germany's services PMI fell to 56.0 in May from 56.4 in April, confounding expectations for the index to remain unchanged.

Separately, Spain's services PMI fell to 55.7 in May, from a reading of 56.5 the previous month, while Italy's services PMI rose to 51.6 last month, from 51.1 in April.

Later in the day, the U.S. was to release the ADP report on private sector job creation, as well as a report on trade balance.

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Forex Signal for 4th June 2014

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

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EUR/USD

 Up Trend :

 (1) BUY

Entry Point: 1.36210 

Take Profit: 1.36410

Stop Loss:   1.35800

 

GBP/USD

Down Trend: 

(1)SELL

Entry Point: 1.67530 

Take Profit: 1.67000

Stop Loss:   1.68000

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
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