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Bulls emerge in UK markets
Traders are slowly gaining confidence in equity markets as bullish behaviour returns in the wake of the emerging markets panic sell-off, but there is still a feeling that we are not out of the woods yet.
The weak industrial production figures from France and Italy are additional proof that the eurozone is sliding towards stagnation. Mario Draghi may choose to ignore that the region is under attack from deflation; he clearly does not want to pull the trigger on a stimulus package.
Traders are turning up the heat on Centrica as there is speculation that the government will break up the firm. It doesn’t look good when the gas company is revealing record profits while the public are getting their fingers burnt on energy bills.
Barclays surprised the market this morning, revealing its headline figure a day early. Unfortunately, only bad news is announced in such as way; revenues were declared lower on the year.
Profit-taking knocks Dow
In the US the Dow Jones is off 38 points at 15,755, as profit-taking has set in on the back of last week’s rally after unemployment dropped to its lowest rate in over five years.
Janet Yellen will testify in front of the House Committee on Financial Services tomorrow, in her first announcement as Federal Reserve chair. Ms Yellen is unlikely to rock the boat in terms of tapering – she is certainly not expected to keep trimming the quantitative easing scheme at the rate of her predecessor.
Gold awaits QE news
Gold traders are gearing up to Ms Yellen's testimony tomorrow. She is a well-known dove and dealers foresee the current quantitative easing scheme being left untouched for the foreseeable future.
Aussie in for rocky week
The Australian dollar is offside ahead of Chinese trade figures overnight. Announcements from Beijing and Canberra this week could push the dollar even lower.