Sentiment remarkably calm

In mid-morning trading the FTSE 100 is down 25 points, as sentiment can still be characterised as mild worry rather than outright panic.

European traders have either decided to fully anticipate a last-second agreement by the two main political parties in the US or are curiously calm. Either way, in early trading the FTSE and the Euro Stoxx 50 are both off just a touch. This relative bravado is unlikely to last much past early afternoon should there be no further developments, and an aggressive sell in late afternoon trading could well take place. 

Fortuitously there is a dearth of UK corporate news out today, but almost all eyes will be focused on the macro issues being affected by the US political scene regardless. 

Now the Bank of England has altered its key triggers for interest-rate decisions, the UK's unemployment figures have even more significance. However, as expected, the Bank's 7% target is still some way off, since UK unemployment came in this morning  unchanged in the three months to August. Europe also has economic data to digest, with the latest trade balance figures being released later today. 

Meanwhile, the silence coming out of the US is deafening. The lack of progress has already encouraged one of the debt-rating agencies, Fitch, to put US debt on a negative watch, and surely it can’t be long before others follow suit – regardless of any agreements reached today. Under normal circumstances we would be looking ahead to the latest US firms reporting today, among them Mattel, Bank of New York, Bank of America, eBay, American Express and IBM, but it seems unlikely that these third-quarter figures will be given much notice. With the current Dow futures indicating a start 55 points higher at 15,223, it can only be assumed that US traders don’t realise that the light at the end of the tunnel is actually a train.

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