Foggy start reflected in early trade

European equity markets have lacked the temerity to retake their recent highs.

Cautious UK outlook

The re-emergence of debt ceiling concerns, along with muddled central bank guidance, has helped to inspire caution rather than risk. Despite showing signs of sustained growth the German business climate index fell short of expectations, and even an upbeat assessment on the UK economy from Bank of England rate setter David Miles could not wake investors from their reverie.

Tesco has found itself the receiver of more bad news. The supermarket giant, having admitted defeat in its attempts to crack the US market earlier this year, saw its market share on home soil further plundered by the competition as the share price shed 0.8%; however, the supermarket has still seen some support of the company’s new foray into the tablet market. A competitive yet growing industry, it remains to be seen if Tesco can compete with the likes of Google Nexus 7 and the Amazon Kindle Fire.

Recently dropped from the market vectors gold miners ETF known as GDX, Polymetal International has shed almost 17% in the last three trading sessions. It has recouped some losses today, however, rising 3.3%, and was the best performer on the FTSE .

Shareholders in cruise operator Carnival were less then jubilant as the company announced a 30% drop in its Q3 profit. The share initially fell by as much as 8% before staging a mild recovery leading up to the close.

US markets wavering

The S&P 500 has faltered a little today, threatening to fall below the 1700 level. The Federal Reserve Bank of Richmond's composite index of manufacturing showed that activity stalled in September as, while a metric of 17 was expected, the index read zero. Consumer confidence was also marginally below the consensus, while the Case-Schiller house price index was sub-par. Given how important the US housing recovery is deemed for the overall economic picture, it is little wonder that markets are beginning to tarry.

Facebook can apparently do no wrong these days. Following the release of its second-quarter results in July, there has been heightened appetite from investors. The significant uplift in its mobile advertising revenue of late has stamped out the bears. News that the social media site will now be allowed into China has seen the share price crack the $49 per share mark, an all-time high.

Citigroup upgraded its price target today, which has helped put it on a trajectory to poke that psychological $50 level.

The Dow is currently trading up a meagre 17 points at 15,418.

Safe-havens benefit

The caution in risk assets has been of benefit to safe-haven currencies today, with the Japanese yen outperforming the G10 majors. The dovish comments from the US Federal Reserve have clearly resonated with USD/JPY traders, sending the dollar lower. The promise earlier this week from the Bank of Japan that more intervention to weaken the national currency could be introduced if deemed necessary is being ignored for the moment.

Oil suffers from tapered war cries

Oil prices have eased back, owing to dampened concerns about supplies from the Middle East. Worries about Syria and the potential military intervention appear to have tapered off for now. The fact that China appears to be rising from its earlier slump may help to underpin prices from this point. Brent Crude is finding support around the $107/107.50 level.

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