British prime minister David Cameron continues to press the flesh in Asia, and numerous soundbites are inferring that Asian countries and investors have a willingness to fund infrastructure projects inside the UK. Coupled with this have been extensive leaks about George Osborne's plans for government expenditure over the coming years. The markets will be monitoring all of these ahead of tomorrow’s MPC rate statement.
It has been the turn of the service PMI figures to show their mettle this morning, and a particularly weak set from Italy has not been enough to drag the EU average down. However, the notably hot UK figures look to have cooled just a touch.
Market reaction to today’s Tesco figures has been remarkably muted, partly due to the fact that they had been well signposted. A 1.5% drop in sales was within the anticipated range, but continuing drift in the firm's market share and its as yet unsuccessful attempts to re-focus on the UK market have left traders somewhat underwhelmed.
Sage, on the other hand, has led from the front as the FTSE 100’s biggest riser. Less than two hours into the trading day the share was up over 8%, following the company's bold predictions that it can achieve a 6% increase in revenue growth by 2015. The driving force behind this claim is the encouraging signs about demand for Sage's new cloud-based product.
A raft of companies have gone ex-dividend today. Among them are Aberdeen Asset Management, Land Securities, National Grid, Severn Trent and SAB Miller. That being said, these only account for a drop of 3.88 points for the FTSE.
The next three days will confirm one way or another if there is to be any change to the current Federal Reserve debt- purchasing scheme. Any change that might be forced through before the end of the year could well spook the markets, therefore making it a little less likely. Over the afternoon we will see the latest US trade balance figures, new home sales figures and the Fed’s Beige Book, all of which will give the markets cause for nervousness. Ahead of the open, we expect the Dow to start 20 points higher at 15,934.