European data to dampen FTSE

In mid-morning trading the FTSE 100 is up over 25 points, but traders' enthusiasm is likely to be reined in soon by looming EU economic forecasts.

European Central Bank president Mario Draghi has been outrageously positive recently, regardless of what EU economic data has been thrown his way. With figures seeing a recent downturn, however, it is likely that it will take more than just his willpower to maintain momentum. Speculation has intensified that either a cut in interest rates or, more likely, a relaxation of regulations will be required to assist mainland Europe. 

Although late out of the blocks as it waited for the Hang Seng to close, HSBC has reported its third-quarter figures and made rapid progress up the FTSE 100 leader board. 

Charging in the opposite direction is Scottish engineering firm Weir Group, which has announced that annual profits could miss the mark by as much as 7%. Shares in the first hour of trading were down by more than 7.5%. 

Asset stripping remains a major focus for many of the banks, none more so than Royal Bank of Scotland who is already well on the way to selling off another of its US subsidiary companies, Citizens Bank. It now appears to have suitors fluttering eyes its way in an effort to prize away the remaining 28.5% stake of Direct Line Insurance.

Solid European sentiment should help ensure that US markets start the week in the same bullish mindset that they closed out the last. Just after the US open we will see the latest monthly factory orders, followed by Federal Open Market Committee members Jerome Powell and Eric Rosengren speaking at different events across the day. 

Although markets are still waiting to hear from a few US corporate firms the majority have already reported, and attention can once again return to the hunt for solid income returns. 

Ahead of the open, we expect the Dow Jones to start 40 points lower at 15,500.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.