The 'No' vote continues to fight back in Scotland, aided somewhat by the business community and its perceived implications of a breakup of the union. The market situation is not risk-off as we saw on Monday, but traders are really starting to think how they are going to be positioned come next week. This is keeping some money off the table but we haven’t seen a rush for the exits yet; with any speculative 'they won’t really vote for independence' trades being directed towards cable and a rebound from its recent poor run.
We are still around half a cent shy of closing the gap created by the weekend’s drastic re-rating of sterling’s dollar rate, and $1.66 looks even further away. We have seen some action in upside out of the money calls, and our binary market continues to recapture it’s 'No' majority, with an 82% chance now seen.
Blue chips are led higher by Tullow Oil (+1.5%), Barclays (+1.3%) and Barratt Developments (+1.4%) as only a few stocks are better by more than 1%. Tullow has offloaded some of its Dutch interests, Barclays has appointed the head of Aviva and Firstgroup as its new chairman, and Barratt continues its post-update comeback, testing its earlier summer highs of just under 390p.
Stocks in Europe are slightly more subdued as EU sanctions on Russia remain major news, with meetings of EU heavyweights in Brussels and Milan scheduled today likely to be focusing on the continued problems amidst another bunch of average data, lacklustre inflation in Spain and falling industrial production in Italy.
With US retail sales for August on the agenda pre-market, we are currently calling the Dow Jones to open down around 20 points at 17,030.