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Strong US close boosts FTSE

Mid-morning trading sees the FTSE 100 basking in the morning sunshine, up 25 points as the index finally finds some buyers in the wake of the ECB meeting.

Canary wharf
Source: Bloomberg

After the excitement of the ECB comes the excitement of non-farm payrolls. The initial reaction to Mario Draghi yesterday was indecisive at best, but UK traders have taken their cue from yet another strong finish in the US and are making decent gains. Compared to the US, London’s performance has been sluggish at best, but a strong reading on today’s US numbers would act as an excellent accompaniment to Mr Draghi yesterday, helping to put us back on track for 6900.

Acquisition talk is back in the air, as the old story of a potential bid for Centrica comes round again. The management turmoil at the top of the company means now is a promising time, with shareholders likely to be tempted by the prospect of a firm hand on the tiller.

The wide spread of expectations surrounding today’s job numbers indicate how divided opinion is on the US economy, and by extension on the stock market itself. Recent revisions to non-farm numbers have tended to the upside, but the 288,000 figure of April looks vulnerable to a downward shift, especially after the ADP figures on Wednesday. As the end of the week looms it seems entirely possible that markets will end fairly quietly, as traders close out positions following a two-day burst of volatility. 

Ahead of the open, we expect the Dow Jones to start 15 points higher at 16,851.

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