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A busy day dawns for markets, with a bombardment of data that leaves little time for traders to rest. It started early this morning with weak German retail sales, but the picture got better as both German and Italian employment data showing welcome improvement. We’ll have a brief pause for breath late morning, but then the fun begins as US figures come thick and fast. This is the start of a hectic three-day period, and by the end of the week we will be well setup for the rest of the summer, having had earnings, economic news and central bank activity aplenty.
In London, the FTSE 100 languished in the opening part of the session, before discovering a new lease of life and bounding like an eager puppy back towards 6600. This has marked the limit of advances so far this week, but the third time is often the charm, especially when you consider the flood of data today.
Company earnings abound, with drinks giant Diageo one of the main events. New CEO Ivan Menezes was able to hold his head high during his first set of results, exceeding expectations thanks to a better performance in the US. If it can keep this up, the company will have a much easier job allaying fears about slowing growth in the emerging markets that have powered its growth thus far.
ADP employment numbers will start the ball rolling this action-packed afternoon, swiftly followed by US GDP. Even if the latter indicates the expected modest slowdown in growth, GDP revisions from the Bureau of Economic Analysis might help offset any negativity if they suggest growth was better than previously thought.
However, the big event comes this evening, when the US Federal Reserve committee announces its latest decision. With no press conference, the accompanying statement will be all we have to go on, and this will be duly fed into the matrix to help us try to assess when the taper may begin.
Ahead of the open, we expect the Dow Jones to start 25 points higher at 15,545.