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Markets start the week with gains

In mid-morning trading, the FTSE 100 is 40 points higher, lifted by confidence regarding a US rate increase and rising insurer share prices.

Mark Carney
Source: Bloomberg

Markets have gotten off to a good start this morning, taking their cue from a bullish US performance on Friday. We look set for an environment that will see the dollar and global stock markets rise, so long as the Federal Reserve delivers on expectations to increase interest rates this month. Markets have already endured one disappointment from a central bank, and a second could seriously damage the general feeling of comfort and acceptance that now appears to accompany marginally tighter monetary policy.

UK-listed insurers are in the ascent this morning thanks to news that their internal models for solvency have been accepted by regulators. While the arcane elements of the new  regulation will be difficult to interpret for most investors, it is always good to know that such firms are well-positioned to weather any future storms.

Mark Carney will provide most of the excitement for the day, as this afternoon is bereft of major US economic or corporate news. Having rallied strongly on Friday, we may see Wall Street struggle for fresh direction, but December seasonality should start to make itself felt from here on in, which will make a rally easier to construct. Ahead of the open, we expect the Dow to start at 17,861, up 14 points from Friday’s close.

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