The morning session was dominated by poor Chinese data overnight, counteracted by solid European economic data. Although not enough to convince people of a shift in the trend of European economic data, it did give cause for optimism. The FTSE 100 has struggled to show any real desire to move higher or lower over the last four trading days, having closed only fractionally higher or lower than its open and with less than 100 points in the trading day’s range. Indecision has taken over traders. Looking at the IG client sentiment indicator for clients holding positions in the FTSE the picture is similarly confusing, with 51% short and 49% long.
The solid start to the markets was somewhat disturbed just as the US markets opened, as rumours about a possible German downgrade circulated. However, after an hour passed without any further confirmation, this prospect seemed to be ignored.
Tomorrow’s UK preliminary quarterly GDP figures will hopefully give FTSE dealers an opportunity to trade.