The FTSE 100 opened around the 6500 mark and has been drifting lower all day. Natural resource stocks are the main culprits: the sector is off over 2% as traders are unwilling to go long without talk of Chinese stimulus doing the rounds. The level of bad debt at Spanish banks has reminded investors that all is not well in the eurozone, and British banks are in the red as traders are worried about their level of exposure to indebted European nations.
The Dow is just below the 15,100 mark, broadly unchanged on the day. Traders are sitting on their hands ahead of the FOMC minutes on Wednesday, and as September edges closer investors are beginning to wonder just when tapering will kick in. In typical Fed fashion, the calls for tapering differ from member to member. But the earliest suggestions were for next month, so even if this doesn’t come to a head, more pressure will be added to the October meeting.
Copper is offside, as Chinese demand is waning and traders are opening their short positions now ahead of the Beijing manufacturing report on Thursday. Gold has lost nearly 1% today as profit-taking set in. The precious metal reached an eight-week high on Friday and dealers are cashing in their chips ahead of the Fed's meeting on Wednesday.
Weak new car sales from Australia underlined the fact that domestic demand is falling and the country is adjusting to life after the mining boom. Overnight the RBA will release its minutes, and any clues to additional rate cuts could put further pressure on the Aussie dollar. The Bundesbank suggested the ECB could increase rates to combat inflation, which pushed the single currency higher.