Caution ahead of FOMC minutes

In mid-morning trading the FTSE 100 is down 20 points as traders appear to be erring on the side of caution ahead of the release of the US Federal Open Market Committee minutes.

FTSE traders might have wondered if an improving economic picture would alter the balance of opinion inside the Bank of England, but the continued 9-0 vote in favour of the current base rate has quashed that speculation for the time being. Mark Carney has overseen a very steady start to his leadership and it appears that, for the moment at least, other voting members are happy to follow his lead. If the current rate of improvement in the UK economy is maintained, however, it might not be too far into 2014 that opinions begin to change. 

Aberdeen Asset Management’s shares have received a fresh boost this morning as a raft of institutional analyst notes increased price targets for the fund management firm. 

GlaxoSmithKline has sold off 28 million shares in South African drug-maker Aspen Pharmacare, raising $649 million. This still leaves the company with a 12.4% holding in Aspen; two-thirds of its previous holding. 

Shares in Kentz Corp have received a welcome boost from the announcement of the company's new $190 million contract with Qatar Petroleum, which will cover the 775 wells of the Dukhan oilfield in the Middle East.

An afternoon packed with retail and inflationary figures, coupled with continuing comments from numerous members of the FOMC along with the minutes of the last meeting, should ensure a lively afternoon for US markets. This is now the second day in a row that the Dow Jones has hit highs before losing confidence and ultimately ending the day lower; it will be interesting to see if the FOMC minutes two hours before the end of the US trading day are enough to break this trend. Ahead of the open, we expect the Dow to start 40 points lower at 15,500.

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