FTSE opens above 6600

In mid-morning trading the FTSE 100 is up 10 points, having opened above the 6600 level for the first time in a week.

The potential problem areas of the US Federal Reserve and Chinese economic data have been negotiated with a degree of success, allowing markets to push higher this morning. The Fed appeared to be tip-toeing towards a somewhat more dovish assessment of the US economy, and mercifully the dreaded word ‘taper’ was nowhere to be found. China bears (presumably of the panda variety) were given no succour by this morning’s better PMI number. After the little matter of the Bank of England and ECB meetings are out of the way we will plough on towards Friday’s non-farm payrolls, so trading today could still be of the somnolent variety.

The level 6600 has been cleared once again on the FTSE 100, which throws open the possibility that the May highs of around 6800 are in play. Lloyds has shown Barclays the correct way to announce results, surging 8% after it returned to profit for the first half of 2013. To add to the bullish mood the bank was even brave enough to wave a carrot in front of investors, in the form of a potential dividend. All eyes now turn to the Treasury, to see whether Chancellor Osborne will take this opportunity to announce further progress on a sale of the government’s stake. Today’s move means the post-crisis price high, just below 80p, is just a short distance away, with Lloyd’s the star performer in the sector this year, up 54%.

Having been soothed by the Fed statement last night, investors go into today’s US session in a far calmer frame of mind. Jobless claims and an ISM manufacturing number are on the list today, but this is really just an interlude between the twin behemoths of Wednesday’s and Friday’s data load. They may have finished last night in lacklustre form, with 1700 still the level to beat for the S&P 500, but futures suggest a healthy start this afternoon. Ahead of the open, we expect that the Dow Jones will begin the session 70 points higher at 15,570.

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