Markets lack purpose ahead of Thanksgiving

With the impending US holiday, markets are happy to ease higher rather than move with any real purpose.

FTSE up 20 points

The FTSE 100 is slowly making back yesterday’s losses as it appears be dragged begrudgingly higher by the DAX, buoyed with improving sentiment and a more stable political scene. 

European markets have headed higher over the day, but without the conviction of really knowing where they are going. The improving confidence from Germany, coupled with confirmation that the Social Democrats will form a coalition with Angela Merkel’s Christian Democratic Union, could well be used as the reason; but very few market-watchers will have found this surprising in any way. Data out of the UK today has confirmed our quarterly GDP is on course, but has raised questions over the slower-than-expected growth in business investment. 

Royal Mail has posted its first set of figures as a quoted company. First-half profits of £233 million will make good reading, although they were predominantly achieved prior to its float. These figures now make the promised summer 2014 dividend payout of £133 million a little more comfortable. 

Shares in Compass Group have remained amongst the biggest risers of the day following the company’s announcement that it will embark on a £500 million share buyback scheme. 

United Utilities has announced a 5% increase in its dividend to keep investors happy, and has promised to raise water bills at a pace below the inflation rate for the next few years.

Turkey trumps markets

With the Thanksgiving holiday tomorrow, it is unsurprising that most US traders have half an eye on the upcoming turkey and trimmings rather than the lacklustre equity markets. As usual the temptation to take Friday off and make a long weekend of it will see trading even thinner on Friday.

This afternoon will see the revised University of Michigan figures released, along with lower unemployment claims and weaker durable goods orders. However, as with Europe, any moves today could well be half-hearted in their efforts. 

Gold treads water

Copper has seen economic data from both ends of the spectrum affect the price; Monday's monthly pending home sales shrank rather than increased as anticipated, and Tuesday saw better-than-expected building permits. The net effect of these two is a mildly improving price in a far from convincing move higher. 

Gold has managed to suspend its slide lower for the last two days, however treading water at this point just looks to be delaying the inevitable.

German coalition boosts EUR/USD

Added stability to the German political scene along with the particularly impressive consumer confidence figures has helped squeeze the EUR/USD back above the 1.3600 level. 

After a couple of jittery days trading, USD/JPY has once again taken a leap higher and has gone some way to convincing traders it has finally unshackled itself from the troubled Y100 level after so many false dawns. 

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