The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Following a week of five straight down days in the FTSE, we look set to establish a fourth consecutive rise for this week. The implications of higher rates will no doubt hit the homebuilders disproportionately more than other firms, and as such they are leading the losers on the day. Meanwhile, mining stocks continued rallying despite commodity weakness.
The Federal Open Market Committee struck a particularly hawkish tone in the minutes released yesterday, providing markets with a strong degree of certainty that we will see a hike in December. The meeting took place prior to this month’s bumper jobs report, which highlights that bar an absolute shocker in December, Janet Yellen and co can achieve the 2015 hike they seek.
Weak UK retail sales data has done little to dampen the buoyant spirit in UK markets, with sales falling 0.6% in October compared with September. Retail sales are typically volatile on a monthly basis, especially with Christmas looming; there is little doubt that we will see sales rise once more in November and December. The 11.2% rise in online sales compared with October 2014 shows that shopping habits throughout the UK are moving away from the high street and towards digital transactions, exemplified by the rise of Black Monday and Cyber Friday.
Ahead of the open we expect the Dow Jones to start 55 points higher, at 17,792.