Markets in London are drifting listlessly in the heat this morning, as they endure a period of calm before a potential storm later in the week. Chinese GDP data yesterday was enough to start the week on the front foot, but now we have to wait until Ben Bernanke begins his testimony to the Senate later in the week for anything likely to drive the market in a definite direction. At least we’ve had inflation data for the UK, which shows Mr Carney has some leeway in his approach to the tricky task of reviving the UK’s economy.
After climbing to a six-week high yesterday, the FTSE 100 has paused for breath, but this is probably just a result of the lack of news rather than heat exhaustion from the exertions of the preceding session. There was yet more bad news for the hard-pressed consumer, as inflation rose to 2.9% for June, while the boss of Npower thinks that energy bills are likely to rise faster than the government thinks. Forget tinkering with benefits or Trident, the pressure on consumers is the real problem that should exercise Whitehall.
Rio Tinto was lifted by 2% today after a reasonable production update, with miners in general enjoying another day in the sun following yesterday’s China figures. Rio might be looking at higher copper output but that will be in vain if demand in China drops off. Fortunately that doesn’t look to be the case at the moment.
US inflation numbers will be the latest piece of information to be fed into the matrix today, as investors and the Fed both try to gauge how the world’s largest economy is faring. Ultimately no-one today will be looking to make any major commitments in the market, preferring to wait until Mr Bernanke’s prepared testimony hits the markets tomorrow. Ahead of the open we expect the Dow Jones to start three points lower at 15,481.