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A day shaped by central bank rhetoric

Heading into the close the FTSE 100 is down eight points, although it is comfortably off its lows for the day.

With the inflation rate already meeting the Bank of England's target, and the unemployment level fractionally above its previously set target, the question is: when will interest rates rise?

The committee has set out a second phase made up of 18 targets which the BoE would like to see achieved before change is implemented. Fundamentally it would like to see higher income, fuller employment and a more solid economy before looking to gradually increase the rate.

The outlook for UK homeowners would suggest that they can look forward to these historically low levels of interest rate remaining for some considerable time to come.

Ex-div stocks leave FTSE relatively unmoved

Considering that a number of the larger FTSE 100 equities have gone ex-dividend today, knocking 11 points off the index, it has performed relatively solidly. Once again the miners have had their fair share of support and make up a sizable contingent of the top-movers table. In contrast, Tullow Oil, having released figures this morning, has not been as well-supported, wiping out a week’s worth of gains.

Reckitt Benckiser has seen steady growth in developed markets, but newer regions such as Russia have dragged the net revenue figures lower.

US markets react well to Yellen

The aftermath of Federal Reserve chair Janet Yellen’s first grilling from the House Financial Services Committee has been seen as positive, with the three major US equity indices all rounding off the day higher. Although this has been taken well by the US markets, there were few crumbs of comfort for emerging markets as sentiment was firmly focused on implications to the US economy, with little regard for the global consequences. For the time being, at least, we can expect the Federal Open Market Committee to continue the current pace of reduction to the US debt-purchasing scheme.

While everyone’s attention has been diverted by this historic event, the US house has passed an agreement to suspend the US debt ceiling until March 2015.

Gold and oil look strong

Gold traders wanted the precious metal to show a little grit and determination, and over the last week it has made a determined effort to get back up to the $1300 level. After last week’s exceptional move higher, many have been wondering if Brent crude had the stomach for the heights, and the price action over the last two trading days suggests that there might be higher levels yet to come.

Carney and Draghi influence currencies

Today will offer currency markets plenty of pointers, with both the BoE's Mark Carney and European Central Bank's Mario Draghi talking. Going into the afternoon session EUR/USD has dropped by 60 pips, ending its February charge higher.

GBP/EUR has jumped by over 100 pips today once again showing that buyers are re-emerging at the 1.2000 level.

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