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Opportunity for traders amid Draghi's QE views

A less than enthusiastic start to the week has seen the FTSE 100 drop by 48 points.

Mario Draghi
Source: Bloomberg

Once again, European finance ministers will be meeting in Brussels for their monthly meeting. Although no specific announcement is due it does offer an attractive platform for soundbites from European politicians. Considering European Central Bank president Mario Draghi’s insistence that any decision on a euro version of quantitative easing would not need to be unanimously agreed to be implemented, some might see this as an opportunity to aid their own agendas.

The Bank of England’s quarterly bulletin has once again glanced into its crystal ball and predicted that by 2050, the UK banking system could more than double its 450% of GDP size up to 950%. In the UK, banks from over 50 different countries now have operations and almost 20% of the world’s banking activity is now booked in the UK. The possible implications for interest rate rises have also been discussed leading to the belief that if interest rates were to grow to 2.5%, mortgage defaults could increase by 30% affecting 480,000 UK households. 

News that Marks & Spencer has been hit with gremlins that have disrupted its online platform has seen markets react sharply, sending the UK food and clothing retailer to the top of the FTSE fallers list, highlighting the importance markets are placing on online shopping. Last night’s high jump in China’s trade balance figures has seen commodity and mining stocks in the FTSE lose some of their appeal. 

The Dow Jones missed hitting the 18,000 level in Friday's trading by less than 10 points, and even with the lacklustre start to European markets this morning a fresh attack on this level looks inevitable in the coming days. As inclined as US traders are to focus inwardly, the presence of William and Catherine, the Duke and Duchess of Cambridge, could just be enough to see the UK brought under the spotlight.

Ahead of the open we expect the Dow to start 56 points lower at 17,902.  

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