FTSE starts busy week with sea of red

The FTSE saw early morning panic, though has recovered somewhat and by mid-morning is down only 40 points.

Trading screen
Source: Boomberg

Just over a month ago expectations that the FTSE could break above the 7,000 level were common, with the index trading less than 100 points away. However, the subsequent  economic data out of Germany and dismantling of confidence has not only slaughtered European markets but dragged the UK down too. 

We're only an hour or so into Monday's trading and this already feels like it will be a long week: ratings agencies are downgrading their outlook on France, Tuesday's German ZEW data is thought unlikely to inspire, the European Council is likely to reject the latest French budget and Thursday’s eurozone inflation figures are a real cause for concern. All these factors together look set to insure that the VIX Fear index will remain high; in fact the situation is so gloomy that gold, the flight to security, appears to have woken from its slumber. 

A similar pattern to last week has emerged in the FTSE, with miners continuing to do their best to prop up the index. Once again Randgold and Rio Tinto are leading the way.

Meanwhile, it's the quiet before the storm for US traders; although with the global turmoil surrounding them, it is debatable how enjoyable this Columbus Day bank holiday will be. Tomorrow will see the US reporting season kick it up a gear as the heavy-hitting US banks begin to report, with both JPMorgan and Citigroup posting before the US market open. 

US Federal Reserve chair Janet Yellen will be glad she is not speaking until Friday, as it will give her a few days to gauge how deep the markets' panic is and enable her to include sufficient wriggle-room when the topic of US interest rate rises occur.

Ahead of the open we expect the Dow Jones to start 66 points lower at 16,478.  

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.