FTSE has directionless day

Heading into the close the FTSE 100 is down 15 points, as the market drifted between positive and negative territory throughout the day, and the start of US trading has put further pressure on the London market.

RBS external
Source: Bloomberg

RBS leads banks lower

The bailed-out bank is considering offloading Ulster Bank, which is now in the black, dampening Friday's euphoria.

Merger and acquisition activity still surrounds the pharma sector. Reckitt Benckiser is hoping to dispose of its pharm division, while GlaxoSmithKline is contemplating spinning off its health unit. Pfizer is due to report tomorrow and the US drug giant is still on the prowl.

Meanwhile, if any shareholders need mothering or care it’s the investors of Mothercare; the stock has taken yet another knock as both the finance director and the US suitor walked away from the firm. 

Disappointing US data pulls down Dow

In the US, the Dow Jones is down 45 points at 16,914, after disappointing service and housing figures ensured the US trading session got off on the wrong foot. Traders are looking for any excuse to take money out of the equity market ahead of the Federal Reserve meeting on Wednesday. US reporting season continues with Herbalife after the closing bell tonight. The heath food company managed to rally after Bill Ackman’s torpedo presentation, but can its figures make the hedge funder manger eat his words? 

Copper traders anticipate rise

High grade copper appears to be gearing up for an attack on the 330 cents per pound mark as traders anticipate strong manufacturing figures from China at the end of the week. The recent HSBC survey of China came in at an 18-month high, but I doubt Beijing will disagree.

Gold can’t seem to get away from the $1300 level. Tensions in Ukraine and the Middle East could provide a flight to quality rush but non-farm payrolls is likely to drive it lower again. 

Upcoming US reports weigh on FX markets

The euro is putting up a good fight against the US dollar but it is still drifting towards $1.34. Wednesday will be the acid test for the single currency, when German CPI is released and the Federal Open Market Committee meets. I expect soft German inflation figures will set the tone and the Fed's statement will ensure a move below $1.34.

Sterling is eyeing the $1.7 mark but traders don’t have the appetite as this week is more dollar-focused, due to the aforementioned Fed meeting and the jobs report on Friday. The UK’s growth is not to be ignored, however; the pound is expected to continue to hit new multi-year highs versus the greenback.

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