Calmer markets look to NFP Friday

Heading into the close the FTSE 100 is down 30 points, although it is comfortably off its lows for the day. Vladimir Putin’s speech yesterday calmed market fears regarding a breakout of fresh European conflict. 

Surprisingly enough, markets have already started to focus on the economic data releases set for the rest of the week, culminating in the always interesting US non-farm payroll figures on Friday.

FTSE stabilises in early trading

The news that China had set an economic growth target of 7.5% helped the FTSE stabilise in early trading, as the Asian powerhouse looked to continue its growth – albeit at a slightly reduced rate from last year. 

UK insurance companies have held their spots at the top of the FTSE 100 risers list all day, with Admiral Group posting impressive 2013 pre-tax profits for the year, up 7% from 2012 figures. RSA Insurance has benefited from press speculation that the 'sage of Omaha' Warren Buffett is set to invest in the embattled firm, which is now under the stewardship of former RBS man Stephen Hester. Operating earnings grew by 7% less than market expectations, which subsequently saw the share price struggle under broker downgrades and weakening investor sentiment. 

Conversely, recruitment firm Michael Page has outlined its optimism for the year ahead, while simultaneously missing its 2013 targets. 

Having seen over £100 million added to its valuation, the IG Poundland grey market has given back almost £20 million in today’s trading. As yet the Pets at Home market has not fully sprung to life, but, with the interest levels in IPOs continuously growing, this could change. 

Looking ahead to tomorrow, the UK has just passed the five-year anniversary of the Bank of England’s base rate being at 0.5%, and it looks highly unlikely that tomorrow’s decision will change this trend. 

US sees slow start to trading day

The swift reversal of Monday’s losses by the Dow Jones last night has given European markets a sense of stability, though has not emboldened the US markets to continue that move in early trading. 

Today’s meetings in Paris by US secretary of state John Kerry will see him battling on two fronts: firstly, garnering support from oil-and-gas-dependant European countries, who are fearful that their fragile recoveries could easily be derailed if energy supplies were to be disrupted; secondly, tackling his Russian counterparty’s assertions over Ukrainian liberation rather than invasion. The actions taken by Russian troops have reduced the fear that troubles in Ukraine might escalate, and have enabled the markets to focus back on the economic figures due for release today. Traders will be particularly keen to see the latest from the Federal Reserve’s beige book, as it is used by the Federal Open Market Committee as one of its key indicators for change. 

Commodities continue to fluctuate

Today's more relaxed attitude to the ongoing east-versus-west haggle for Ukrainian hearts and minds has led to both Brent crude and gold drifting lower. The balance of this week will see speculation increase over sanctions that the US and its allies might impose on Russia for its outwardly aggressive actions. Rhetoric is likely to be high, but the action mainland Europe can afford to take is likely to be considerably less aggressive.

FX markets await ECB meeting

Last Friday's gains in US have slowly but surely been eroded away over the course of this week. Tomorrow will once again see European Central Bank president Mario Draghi discuss strategies for tackling the low inflation rate for the EU. The longer the rate remains subdued, the more speculation will abound that negative interest rates on deposits will be introduced. Today’s monthly increase in the EU’s retail sales may therefore be too little too late.

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