FTSE hesitant as a busy week gets under way

In mid-morning trading the FTSE 100 is up just ten points, as traders remain pensive ahead of an economic-data-filled week.

The FTSE has plenty of things to contend with in the coming days, with Chinese trade balance and inflation figures and US monthly retail sales figures due for release, as well as Federal Reserve chair Janet Yellen speaking twice this week. All these are very important, but without doubt this week's most influential issue for the FTSE will be the Bank of England’s quarterly inflation report and the accompanying comments from the governor, Mark Carney. Particular interest will revolve around the improving figures and how they might impact on the BoE’s expected timeline for holding interest rates at the current level.

The weekend brought comments from energy secretary Ed Davey, stating that energy firms - and particularly gas suppliers - have failed to address their profit margins. If no improvement is seen, he warned that a break-up of the larger firms might be required. This shot across the bows of gas suppliers has resulted in both Scottish & Southern Energy and Centrica shares leading the FTSE fallers list this morning.

Traders wondered how long it would take for temptation to get the better of those holding the purse strings at Vodafone, and this weekend we got the answer. Vodafone has made a bid for Ono, the Spanish cable company, and following on from its acquisition of Kabel Deutschland. In view of the billions that will still be left over in the pot, it seems unlikely this will be the last M&A activity for Vodafone in 2014.

It looks like a tough start to the week for Antony Jenkins, as weekend press articles have homed in on Barclays' plans to cut its investment-banking arm by up to a fifth, and the emergence of data on 27,000 of the bank's clients.

Last week saw the Dow Jones claw back 400 of the 1000+ points that it had lost over the preceding month. As markets still have a number of issues to address, it will be interesting to see if blind optimism can outweigh the fundamentals. There are only a handful of US corporations still due to report their quarterly figures, and attention will now shift to the economic picture. Following two sets of surprisingly low non-farm payrolls figures, debate over the pace at which the Fed may reduce its debt-purchasing scheme will ensue. Judging by the comments that have come from members of the FOMC voting committee, markets should not expect change in the near future. Ahead of the open, we expect the Dow to start 25 points lower at 15,769.

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