Last week saw the US reporting season begin to wind down and the focus has now shifted to Europe where traders are waiting to digest the latest corporate news from the banks.
The EU as an economic region is still some way from the recovery stage in which the US finds itself, and as such expectations are that much lower; however, following numerous promises of corners being turned from leading EU leaders, improvements will still be expected.
This morning’s UK net lending figures would suggest that individual borrowing has crept up a touch, and that the underlying confidence in the UK has improved. The unwinding effect should see an increase in consumer spending and therefore improved retail sales.
As the FTSE has over the last trading week shown some signs of struggling to hold onto the impressive gains from the preceding three weeks, any good news will be welcomed by the bulls as they struggle to keep the momentum in place.
Even though many trading companies now see as much as a third of their clients place trades over mobile devises, the start of the school holiday season will still take its toll on the equity volumes traded.
Looking over to the US we will still have a number of firms reporting, however the majority of the key players have already posted their figures and sentiment is well entrenched and unlikely to change.
Once again the first week in the month will have most traders watching and waiting for those Friday non-farm payroll figures, as always giving a strong guiding hand to the direction of the rest of the month.
Ahead of the open, we expect the Dow Jones to start 25 points lower at 15,533.