Europe holds breath ahead of FOMC minutes

The FTSE, very much like England’s batting, can’t quite be said to have collapsed, but it is certainly not showing progress.

Traders have spent most of the day treading water and waiting for the day to end. With such important US comments due out after the European indices are closed, it is no surprise that we have seen the FTSE pull back. When you consider that we have seen over 450 points added to the index over the last two weeks, today’s correction is pretty mild.

The FTSE has probably been propped up by this morning’s news that the debt rating agency Moody’s has upgraded its stance on the UK’s banking sector. Although this has not seen the banks move into the blue, it has stopped them from falling further.

In contrast to the lack of movement in equities, both sterling and the euro have managed to claw back some of the ground that they have given up to the US dollar since both the European Central Bank and the Bank of England stated they would be keeping interest rates unchanged for the foreseeable future.

It will be well worth traders’ time making sure they are up early tomorrow and able to fully digest the implications of tonight’s US comments before the opening bell at 8am (London time). 

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