UK stocks decline as Thomas Cook files for bankruptcy

UK stocks declined sharply after the sudden bankruptcy filing of Thomas Cook, which was the oldest tours and travel company. The company, which employed more than 22k employees globally, went into liquidation after the management failed to raise the required amount over the weekend. As a result, the company’s more than 150k customers were stranded around the world. In recent years, the company has struggled to turn a profit. This is because of the changing ways in which people are travelling. Most of them are using the popular booking platforms like Booking and Priceline. This bankruptcy came at a time when the UK is facing the Brexit challenge.

The euro declined today after Markit released weaker-than-expected PMI data. In Germany, the flash manufacturing PMI declined to 41.4, which was worse than the consensus estimates of 44.0. This was the lowest level it has been in six years. In the previous month, the PMI had declined to 43.5. The services PMI declined to 51.6 from the previous 54.8 while the composite PMI declined to 49.1 from 51.7. The same happened in France, where the manufacturing and service PMI declined to 50.3 and 51.6 respectively. In the European Union, the manufacturing PMI and services PMI declined to 45.6 and 52.0 respectively. This data shows how dire the European economy is as the trade war continues.

The price of crude oil dropped slightly after Iran released a British-flagged tanker ahead of the UN summit. The country captured the tanker on accusations that it broke international maritime rules. It also came two weeks after the UK captured an Iranian tanker on accusations that it was taking oil to Syria. The release of the tanker is a relief to the market, after last week’s attack on a Saudi Aramco terminal. 

EUR/USD

The EUR/USD pair declined to an intraday low of 1.0965, which was the lowest level since September 12. The price was also lower than the important support of 1.0990. The price is slightly lower than the 14-day and 28-day moving average. The Parabolic SAR is trading above the price, which is a bearish signal. The currency will likely continue moving lower as traders price-in a more dovish ECB.

UK100

The UK100 index declined sharply to a low of £7286.6, which was along the important support shown in purple below. The price is lower than the 28-day and 14-day moving averages while the accumulation/distribution has continued to decline. The momentum indicator has remained along the 100 level. The index will likely continue moving upwards, to test the previous resistance level of £7384.

XBR/USD

The XBR/USD pair declined to an intraday low of 62.57. This price is below last week’s high of 68.68. On the hourly chart, the price is slightly below the 14-day and 28-day moving averages. The pair is yet to fill the gap that was created a week ago after the Saudi terminal was attacked. Volumes have also declined as traders wait for more information on Saudi. In the American session, the pair will likely continue moving lower.