Insurers are trying their hardest to pretend nothing happened on Friday, and we’re seeing 1%+ gains across the sector. Still, the psychological damage has been done, and while the buyers have come back this morning it looks like insurance – hitherto one of the safer bets in the market rally – is currently not a market for the faint-hearted.
If all else fails, talk of Chinese stimulus always does the trick. The mining sector is on the front foot this morning, after the Chinese premier indicated that infrastructure investment would go ahead as planned. The news enlivened copper prices too, lifting the red metal back above $3 per pound. Again, none of this is particularly new information, but the suggestion of more construction in China is always a good way to put the FTSE in positive territory.
We’re gearing up for a busy period in economic terms, with global manufacturing and services PMIs due later on this week and then non-farm payrolls on Friday. In case that wasn’t enough, there’s also an European Central Bank meeting. While no change is expected, the careful double-act of Mario Draghi and Jens Weidmann may continue, especially after the consumer price index estimate came in this morning below expectations at 0.5%.
Deflation fears stalk the eurozone, but the ECB doesn’t yet seem ready to tackle it.
Ahead of the US open, we expect the Dow Jones to start 50 points higher at 16,376.