The morning session saw equity markets pause, waiting for both the Bank of England and the European Central Banks to update the markets on their respective interest-rate decisions and strategies going forward. Neither offered much in the way of surprises. After 194 MPC meetings and ending with no change in either interest-rate decision or bond-purchase limits feels a little like a damp squib to finish on for Sir Mervyn King. Having been seen to be wildly optimistic with his calls at the beginning of the year when he stated that the EU would probably turn the corner by mid-2013, much of what Mario Draghi has said since has been taken with a healthy pinch of salt. Subsequently the afternoon session has seen the majority of equity markets fall away.
The banking sector was given a jolt this morning when it was revealed that Nomura were placing 84.5 million Barclays' shares on the market at 308.5p on behalf of a client. It will be interesting to see how long this places a glass ceiling on the shares, which have subsequently fallen below this level. The banking sector already has plenty of issues on its plate and will be hoping this does not become a trend. Johnson Mathey on the other hand gave the FTSE 100 a welcome boost with news that its fall in profit would be less than expected. The mining sector, for so long at the forefront of index moves higher, continues to weigh the market down, burdened by the continuing strength in the US dollar and softness in demand from the Asian economies.
US markets have flown below the radar today with most of the important economic data being released by Europe. The one exception to this has been US unemployment figures which came in almost exactly as expected. Both the Dow Jones and S&P 500 indices are flirting with their 50-day moving averages and with trading volumes so low it will be interesting to see if US traders can be more easily convinced to stick with the 'buy on the dip' mentality than their European counterparts.
Verizon Wireless was again in the news although not in this instance in connection with Vodafone. The US mobile phone company has been caught up in the news that the FBI have been information-grabbing those with Verizon phones; as yet this has not affected the shares negatively and Vodafone's management will be praying that remains the case.
Both the euro and sterling looked to be treading water for most of the morning ahead of what was widely expected to be an 'as you were' statement from both the European Central Bank and the Bank of England as they waved farewell to Sir Mervyn King. Interest rates remained the same for both at 0.5%.
The momentum for the Japanese yen has certainly swung and once again the currency cross against the US dollar has drifted back below the psychological Y100 level. The less-than-convincing performance by Japanese prime minister Shinzo Abe yesterday is still dragging the yen lower and it will take more than a little for him to regain the market's trust.
Spot Gold continues to gravitate around the $1400 level, uncertain whether it should be charging for the higher ground or dropping like a stone. For the time being it is doing neither. Jittery equity markets are not bullish enough to push the price lower and not negative enough to see a flight for safety. Those gold bugs looking for a little encouragement will have been cheered by the news that the price has held on to these levels after India, the second largest importer of gold, had increased its import tax on the precious metal from 6% to 8%.
Copper is beginning to wobble after touching the 50-day moving average; with a Chinese economy showing all the signs of cooling and the US and Europe unlikely to pick up the slack it is becoming difficult to see where the demand will come from.