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.
Equities in Europe haven’t moved a whole lot since yesterday’s close. The Chinese stock market is back in business after being closed for one week, and the gains made in Asia overnight were not overly impressive. While China was on holiday, the West was buying stocks frantically as rumours of a stimulus scheme from Beijing were doing the rounds. Now China is back to work but there’s no sign of the stimulus package.
Commodity stocks have cooled slightly this morning as traders are torn between booking their profits from the recent rally or else hanging in there in the hope this is just a pause before a move higher. In these circumstances, if there isn’t another reason to go long given to dealers, it quickly descends into a sell-off.
Sterling is standing still ahead of the Bank of England interest rate decision, and the commentary plus the voting breakdown will be in focus. Sliding inflation will deter members from voting in favour of a rate hike, and this will be music to mortgage holder’s ears.
We are expecting the Dow Jones to open 100 points lower, at 16,810 as dealers are worried about the Fed minutes which are released later tonight. Traders are wondering how close a call it was to keep interest rates unchanged in September. The announcement will be an opportunity to find out what other members of the Fed are thinking, and it is feared they are more hawkish than the more vocal members of the US central bank.