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The political-economic role that Germany plays in Europe is crucial for the developments faced by the eurozone in times to come, so it is little surprise that there is a degree of caution in equity markets as we head into the end of the week.
Having established new five-year highs in the aftermath of the Fed taper inaction, the CAC and the DAX are now trading flat, with the German benchmark on the back foot due to declines in sportswear giant Adidas. The company has cut the low end of its profit forecast for the year by 7.9%. Given the renewed strength in the euro this week, we may come to expect similar profit warnings from the European export sector.
HSBC has cut its target price on easyJet. While the airline's shares have gained over 70% for the year to date, uncertainties abound over the eurozone recovery and the volatility in oil prices. Nevertheless, investors have taken advantage of the brief drop below the 1300p mark, and the price has gained 1.85% in early trade.
Heavily in demand yesterday, the mining sector is being subjected to some profit-taking as metal prices consolidate. The two big performers yesterday, Randgold Resources and Fresnillo, have shed around 2.9% since market open.
The UK had some positive news in respect of its public sector borrowing: Official data showed that UK public sector net borrowing rose less than expected in August. It went up by £11.5 billion, after a downwardly revised 1.1% decline the previous month. The pound has held its upward trajectory in the aftermath of the release, and is trading at just above $1.60.
Later this evening investors have no fewer than three Fed member speeches to anticipate. In light of recent events involving the Fed, any comments from the two voting members of the FOMC will be closely watched for potential clues about monetary policy changes. The Dow is trading flat at 15,636.