FTSE drifts lower after positive start

Traders had few reasons to go long on equities this morning, after the latest UK construction purchasing managers’ index and eurozone producer price index both came in below economists’ expectations.

Stocks edged lower as the session progressed. RBS is weighing on the FTSE 100’s banking sector, with the part-nationalised bank down 2.8% as traders fear the bank will be split-up by the government, which owns a majority stake.

In the US, we expecting the Dow to open 30 points lower at 14,945. At 3pm (London time) the US factory orders and the IBD economic optimism index are released, with both offering an indication of the strength of the US economy.

Dealers are already looking ahead to Friday’s non-farm payrolls report, as it should provide more clues as to what action the Federal Reserve might take in relation to its stimulus policy.

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