Clearer outlook encourages positive sentiment

In mid-morning trading the FTSE 100 is up over 45 points, as markets experience a flurry of optimistic activity ahead of the weekend.

As we round off the first full week of 2014, the outlook is just a touch clearer. We have now had the opportunity to digest the minutes of 2013's final FOMC meeting, at which the Fed finally pulled the trigger on tapering. Meanwhile in Europe, yesterday’s press conference from ECB president Mario Draghi was polished as ever. However, ultimately it left viewers with more questions than they had before he started talking.

After all the activity of the last few days, during which a wide range of UK retailers reported trading figures for the last six weeks, we have a very thin flow today. JD Sports has experienced strong returns and sees full-year profits coming in slightly higher than its previous call of 5.8% growth year-on-year. Casting our eyes ahead to next week, we should receive a plethora of robust figures from UK house builders, boosted by the government's help-to-buy schemes. Following comments from British prime minister David Cameron yesterday, there will be particular interest in both William Hill and Ladbrokes, which will be reporting their figures towards the end of the week.

Looking ahead to the US session this afternoon, it is all about this year’s first non-farm payrolls figures and the US unemployment levels. Currently at 7%, unemployment in the US has long been touted as one of the biggest barometers for interest-rate change. Last night saw the unofficial start of the latest US reporting season, with Alcoa releasing its fourth-quarter figures. Ahead of the open, we expect the Dow Jones to start 45 points higher at 16,499.

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