FTSE up on MPC data

A plethora of corporate data and a shift in Monetary Policy Committee voting has seen the FTSE 100 squeeze 40 points higher in early trading. 

City of London
Source: Bloomberg

It is twenty-four hours to go until we hear from the European Central Bank president Mario Draghi, and last minute jitters are hampering the equity markets' confidence. With a number of equity markets having hit multi-year highs over the course of the week, could this be a case of buy the rumour and sell the news? The UK and the FTSE have their own issues to contend with before then, as the Bank of England has published minutes and voting split from the latest monetary policy meeting. 

Having reverted back to 9-0 for keeping interest rates unchanged, any expectation that rates might rise in 2015 has now been quashed and Q1 or Q2 2016 appear much more likely timelines. The relatively muted reaction in GBP/USD is maybe a reflection of how the MPC voting has now caught up with currency market views.

Unemployment levels have, for the last two months, been called to break below 6% and failed. Having dropped to 5.8%, even lower than had been anticipated, this appears to have been the third-time lucky. These low levels of unemployment have not been seen since November 2008. 

Today’s corporate calendar is full with both Pearson and SABMiller having increased their fan base with solid figures, helping the companies to trade places as the highest climbers in the FTSE. 

Dixons Carphone continues to keep analysts' attention with like-for-like sales up 7% over the Christmas period and an increase to its full-year targets. The combination of synergies of the amalgamated company, and the increasing desirability of its after-sales care, continue to drive the share price higher.

The markets still place a larger importance on the looming June departure of Halfords CEO Matt Davies, who has been poached by Tesco, rather than the better-than-expected Christmas sales results.

Another 5% fall in high street sales for WHSmith has seen group like-for-like sales down 2% giving traders a reason to knock 2% off the share price in the morning session. 

Last night’s Netflix announcement of higher subscription numbers saw after-hours trading shoot 15.5% higher as investors saw tangible returns to the internet television, and now content, provider.

As much as the US banking sector might have underperformed, there is still time for improvement, and today's US Bancorp, American Express and eBay results will be first up to improve sentiment. Last night’s State of the Union address from Barack Obama was a little baffling as he chose to highlight a number of policies that, due to Republican outlooks, already seem doomed to failure. As a platform to announce new directions or objectives this feels like a missed opportunity and left the impression of 'as you were'.

Ahead of the open we expect the Dow Jones to start 19 points lower at 17,496.

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