Edgy markets lack real direction

In mid-morning trading the FTSE 100 is up 20 points, as markets retake yesterday’s lost ground.

So far this year a feeling of edginess has hung over traders, and now the FTSE 100 has once again retraced its footsteps from yesterday. Across the European indices there has been a similar format, with no real sense of direction materialising as yet. This afternoon will see the latest efforts from ECB president Mario Draghi and his cohorts to boost morale at their monthly press conference. The UK for its part has already seen its trade balance figures come in and, as expected, fall to -£9.4 billion. It is highly unlikely the Bank of England will change either the base rate or the asset-purchase facility.

Tesco’s £1 billion spent on refocusing back to the UK market has yet to bear fruit. The food retail giant has seen its year-on-year sales drop by 2.4% for the Christmas period. Morrisons' inability to offer a user-friendly online shopping platform has resulted in a 5.6% drop in its year-on-year sales. Marks and Spencer, whose food arm has partially compensated for the tenth consecutive quarter of falling clothing sales, has found its shares faring better than the other retailers' in the morning trading session. Royal Bank of Scotland looks set to embark on another round of cost-cutting, and staff will be only too conscious that this normally involves redundancies.

Last night’s FOMC minutes certainly held the markets' attention, although ultimately they contained very few surprises. Traders will now quickly turn their attention to the first non-farm payroll figures of the year, released tomorrow. Ahead of the open, we expect the Dow Jones to start 48 points higher at 16,510.

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.