Carney and Draghi to set the tone

Central banker speeches dominate markets’ thinking.

London
Source: Bloomberg

The much anticipated union of SABMiller and AB InBev has edged closer to being completed with the confirmation of the £44 a share cash offering for the FTSE-quoted drinks company. This is likely to trigger a merry-go-round of asset stripping and reorganisation by AB InBev as it raises financing and pre-empts competition requirements.

Considering the strength of the US dollar especially as speculation over interest rate rises intensifies, we could well see this being the first of many cross-Atlantic shopping trips from US firms.

Cost-cutting measures introduced to maintain market share look to have seriously damaged Sainsbury’s as the food retailer has posted like-for-like sales down by 18%.

TalkTalk’s first effort to gauge the cost of recent security problems has predicted a £30-35 million cost, but the longer term damage to reputation is hard to calculate.

Confirming the markets’ confidence in the housing sector, Barratt Developments has reiterated its intention to pay a record dividend of £200 million as CEO David Thomas confirmed the company’s optimistic outlook for the rest of the year.

Currency traders will once again enjoy the volatility triggered by both the Bank of England governor and the European Central Bank’s president, Mario Draghi, speaking at events throughout the day. Data has driven the FX markets’ expectations that December will see an interest rate rise in the US.

The resurgent US dollar has forced both the pound and euro lower, an action more welcomed in mainland Europe than in the UK.

Ahead of the open we expect the Dow Jones to start 46 points higher, at 17,804.

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