European data to dampen FTSE

In mid-morning trading the FTSE 100 is up over 25 points, but traders' enthusiasm is likely to be reined in soon by looming EU economic forecasts.

European Central Bank president Mario Draghi has been outrageously positive recently, regardless of what EU economic data has been thrown his way. With figures seeing a recent downturn, however, it is likely that it will take more than just his willpower to maintain momentum. Speculation has intensified that either a cut in interest rates or, more likely, a relaxation of regulations will be required to assist mainland Europe. 

Although late out of the blocks as it waited for the Hang Seng to close, HSBC has reported its third-quarter figures and made rapid progress up the FTSE 100 leader board. 

Charging in the opposite direction is Scottish engineering firm Weir Group, which has announced that annual profits could miss the mark by as much as 7%. Shares in the first hour of trading were down by more than 7.5%. 

Asset stripping remains a major focus for many of the banks, none more so than Royal Bank of Scotland who is already well on the way to selling off another of its US subsidiary companies, Citizens Bank. It now appears to have suitors fluttering eyes its way in an effort to prize away the remaining 28.5% stake of Direct Line Insurance.

Solid European sentiment should help ensure that US markets start the week in the same bullish mindset that they closed out the last. Just after the US open we will see the latest monthly factory orders, followed by Federal Open Market Committee members Jerome Powell and Eric Rosengren speaking at different events across the day. 

Although markets are still waiting to hear from a few US corporate firms the majority have already reported, and attention can once again return to the hunt for solid income returns. 

Ahead of the open, we expect the Dow Jones to start 40 points lower at 15,500.

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