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Asian trade nudges FTSE higher

On Bank of England decision day, the FTSE has continued yesterday’s slight rally after a better day in Asian trade and a flat lead from last night’s US close. It is up around 20 points at 6475.

Assuming that the members of the MPC are not working from home due to the tube strike, we should expect our by-now customary announcement of nothing at-all at midday today. Despite recent equity market volatility, sterling has held up well against the majority of its major currency peers. Based on the fact that the market is leaning towards some sort of action from the European Central Bank, as Europe has to get to grips with the so-called 'disinflation' issue, we should expect the euro to be under some pressure today and help sterling turn proceedings in its favour for the year. 

Never far from the market-report column in recent weeks, Tullow Oil has retraced 2.5% after yesterday’s late surge. The Statoil story continues to do the rounds, with £14 a share being pushed as the latest takeout figure. The recent move below the £8 mark would certainly justify pausing and taking a look, but this could just be investors trying to breathe life back into a stuck stock.

Ahead of the US open, focus will be divided between digesting Twitter’s first set of numbers as a publicly traded entity and tomorrow’s all-important job numbers. A volatile after-market session, with a high trade above $70, did result in the shares closing down under $55 - a move of around 17% lower from the close. Higher revenues but continued loss-making, together with concerns that Twitter isn’t attracting new users as expected, did put a dampener on its results. The share-price premium that has been constantly highlighted recently will come under even more intense scrutiny now. And the analyst community now has a little more to go on, so we expect changes in ratings to continue the stock’s volatile price action. UBS has already cut the stock to a sell rating this morning.

With one eye on Friday, we expect a more stable session than some of late. We are currently expecting the Dow Jones to open up 30, in line with European moves, at 15,480.

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