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.
It looks to be a dull end to the week, at least in macro-economic terms. The major excitement of the day was news from China, and with this out of the way we could struggle to build up much enthusiasm for the final hours of trading this week. An early move higher was swiftly cancelled out, indicating that traders are still erring on the side of caution when it comes to pushing this market higher.
Miners are the real bright spot for the FTSE 100 this morning, after well-received Chinese economic data gave investors a reason to lift raw materials stocks. The broader FTSE 350 mining sector is down 17% this year, although that figure would look a lot worse if you stripped out the July bounce. The FTSE 350 itself is up 12.5% so far in 2013, and there are justified concerns that the wider market cannot in all likelihood sustain this discrepancy for much longer. Nonetheless, with China edging towards fresh stimulus measures (albeit not on the scale of 2008/9) there is perhaps hope that the miners can play catch-up. For euro-watchers, the announcement of the ECB’s latest three-year LTRO repayment will be a key event this morning, Given the near 200-point rally in EUR/USD in August, it would not be surprising to see this as an excuse for a touch of profit-taking by some, especially as the euro is now at its highest level versus the US dollar since mid-February.
Bereft of economic news, US markets may struggle this afternoon. However, even with taper concerns, the broader picture looks a lot more positive. Given that new listings in the US have hit a post-crisis high this quarter, we can be reasonably confident that companies are more upbeat about the future now, with the steady improvement in the economy adding to the positive outlook. Ahead of the open, we expect the Dow to start 50 points lower at 15,450.