Eurozone focused on Greece

Pre-election nerves prevent the FTSE 100 from keeping up with European equity market optimism. 

London
Source: Bloomberg

Issues in Europe continue to dominate the City’s thinking with the UK focused on Thursday’s general election while those in the eurozone continue to have an unhealthy obsession with Greek debate and austerity. The plethora of services PMI data will give traders' attention a focus and the latest monthly European Union retail sales figures will demonstrate how much confidence has trickled down from institutions enjoying the European Central Bank’s QE to the average European shopper.

With less than 24 hours before the UK goes to the polls, the picture is still unclear as to who will be running the country in the coming days. The latest IG general election binary is showing a 94% chance that there will be no majority government. Having received the support of the SNP the chance of a Labour minority government still appears the most likely outcome, at 34%. The betting on who will become the next prime minister is once again neck and neck having swung from very pro-Cameron to very pro-Miliband and back to parity. With a number of papers in the past 24 hours coming out in favour of either the current coalition or the Conservatives there is still the chance of a 1992-style late swing, an idea that Sir John Major has been doing his best to foster over the past couple of days.

Sainsbury’s figures have shown that it continues to suffer as it sits uncomfortably in the squeezed middle ground of the food retailing arena. Regardless of the company’s assertions of encouraging signs for volume and transaction growth, the ongoing price war has further hampered profit margins resulting in a £72 million pre-tax loss.

Legal & General has had a turbulent 12 months as the change in legislation surrounding annuities has seriously affected the company’s profits, while at the same time the vibrant equity markets have seen funds under management increase by 17% in the first quarter.

The recent introduction of cut price coffee and breakfast at JD Wetherspoon looks to have helped the pub chain as this latest quarter has seen a small improvement in margins.

Meanwhile, SuperGroup is beginning to look a little more super than it has managed to be over the last six months with sales figures up by 18.4% over the last 15 weeks.

Keeping secrets doesn’t look to be one of Elon Musk’s strong points and the announcement later today about Tesla’s diversification from just automobiles and into batteries has been widely anticipated. Considering the huge market that exists for this technology this could offer the struggling automotive manufacturer a new lease of life.

At the beginning of the month we once again wonder if today’s ADP non-farms employment change will be an indicator for Friday’s non-farm payrolls — its track record of late has been patchy at best. Once again currency traders will get to play one of their favourite games — 'hunt the hidden meaning in Janet Yellen’s speech' — as this afternoon the Federal Reserve chair will take the stage at an economic conference in Washington.

Ahead of the open we expect the Dow Jones to start 64 points higher at 17,992.

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