After a few days in which intervention seemed unlikely, markets were rocked by a show of support among US politicians for President Obama’s plan to strike against Syria. This prompted a rapid drop in US indices, and although they still finished in positive territory the nerves have been carried over into this morning’s session.
If there is still anyone out there who thinks the Bank of England won’t have to raise rates sooner than thought, could they please send a note of support to the governor? Today’s services PMI came in ahead of expectations, signalling that the UK economy is enjoying a healthy period. The steady bounce in GBP/USD continues, and while Mr Carney might opine that no action is needed in the foreseeable future, the weight of expectations continues to move against him. Meanwhile, the harps of Erin are weeping for Ryanair this morning, after the company’s share price slumped 13% following a warning that weak bookings will hurt profits. However, with the shares still 40% higher than this time last year, some patient types may view today as an ideal buying opportunity.
Each day that passes brings us a little closer to a potential tapering moment. Today’s Beige Book and ISM manufacturing numbers will contribute to the flood of data influencing the Fed, although it is the job numbers later in the week that are of particular importance. Ahead of the open, we expect the Dow to start 15 points lower at 14,818.