US drags Europe higher

The US has quickly discounted yesterday’s fears of war in the Mediterranean, starting the day in positive mood.

The failure of Michael O’Leary’s aggressive strategy on cheap air travel to meet market expectations has seen Ryanair’s shares collapse. Going into the close the airline is down at least 12% on the day. With Ryanair disappointing, questions are being asked over the abilities of both easyJet and International Consolidated Air (IAG) to perform, and both are off on the day too. Along with the discount airlines, TUI Travel and Carnival are also weaker as a consequence, and the domino effect in the tourism and travel industry has helped keep the FTSE 100 from moving higher for most of the day.

With a raft of important US data due out over the next couple of days, traders might gain a clearer indication of when tapering policies will be implemented. This, along with fuller trading floors, could see a shift in trading activity and market direction. That being said, the more pressing issue continues to be the possibility of war in the Mediterranean, and the destabilising effect it would have on the markets. The confusion in traders’ minds is clearly demonstrated by the fluctuations currently being seen in gold. Starting the day up around $1415 and closing at around $1385, as safe havens go the metal looks very volatile.

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