This week has gotten off to a very different start compared to last week, with a slow morning giving way to modest gains in London. The FTSE 100 is looking to push away from 6700 once again, having dipped briefly through this level last Monday. With no Ukraine news hitting the headlines the atmosphere is one of cautious bullishness, albeit without much actual news flow to support it.
The good news for UK citizens is that the economic experts think the economy will surpass its pre-recession peak this summer. This is earlier-than-expected and is definitely an encouraging sign. It will take time for the good feeling to filter through to all levels of society but ‘a rising tide lifts all boats’, and in such an environment traders will be looking to the retail, house building and travel sectors to capitalise on the sunnier outlook.
Major corporate news is thin on the ground this morning, but news from elsewhere is still making its presence felt. A poor Chinese trade balance reading (and weaker consumer price index to boot) has put the miners on the back foot once again, with the sector giving back most of February’s surge, as traders take advantage of weaker consumption expectations in the east Asian behemoth.
After a lacklustre end to the week for US markets we are seeing little change in US futures, with a lack of economic news perhaps being partly responsible. With time, traders are likely to take a more positive view on Friday’s non-farm payrolls report, which saw an increase in job numbers and in the unemployment rate. The new record close for the S&P 500 shows there is still an appetite to push markets higher, provided the Federal Reserve sticks to its current steady tapering programme. Ahead of the open, we expect the Dow Jones to start unchanged at 16,452.