After a choppy start, the FTSE is working hard to stay in positive territory.
Yesterday’s bumper gains in London may have left traders tempted to start booking some quick profits but further signs of a weakening housing market in the UK are doing nothing to suggest cash yields will be improving any time soon. As a result this does seem to be giving London the edge over mainland Europe, not least given the signs of tighter monetary policy that are now emerging from Sweden with a quarter point hike in its repo rate. Whether traders will be inclined to hold onto this optimism remains to be seen however, as tomorrow’s non-farm payroll figures from the US are now looming and, given the shortfall in the ADP reading, expectations are certainly muted.
What earnings news we have seen this morning has brought little to the table: DSG failed to impress with its trading update, but BG Group and Autonomy are both sitting higher as bid chatter surfaces. Any hints over policy from the ECB will be closely followed, although the long weekend has knocked the BoE’s meeting back to next week. Looking ahead to the US session, weekly jobless claims and pending home sales data may offer further direction but at present we’re eyeing a broadly unchanged start for the major US indices.
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