This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
The issue of tapering has been doing the rounds since May, when the Fed stated that it could happen in September, and as we draw closer to the end of August investors are booking profits in case it happens sooner than anticipated.
UK retail sales increased by 1.1% in July compared with June, the sharpest rise in over two years. Now that the Bank of England has pegged its monetary policy to the unemployment rate, dealers are viewing positive news for the UK economy as a negative for the equity market.
In the US, we are expecting the Dow Jones to open 100 points lower at 15,237, after US jobless claims fuelled tapering fears, falling by 13,000 to their lowest level since October 2007.