FTSE dragged lower
It is the quiet before the storm today as the FTSE has drifted lower dragged by a lacklustre mining sector and nervous jitters about tomorrow’s inflation figures. It's been a weekend where both of the major political parties have done their fair share of grandstanding on top of their respective soap boxes and the election outcome is still as clear as mud (a commodity likely to be slung about sooner or later).
Regardless of the strong boost that David Cameron has received from today’s latest ICM poll, IG’s general election binary on who will be next prime minister still has Ed Miliband and David Cameron neck and neck.
Institutional analysts are back to rating Aviva following the acquisition of Friends Life, and are wholeheartedly behind the company sending it to the top of the FTSE movers list.
Falkland Oil & Gas on the other hand has cancelled plans for a second well to be drilled in the South and East Falkland Basin.
Slow start for US reporting season
US equity indices are playing catch up with their European counterparties today even though the corporate and economic calendars are so quiet. The second week of the US reporting season always gets off to a slow start and the diary for today is a little thin on the ground. That however changes tomorrow as we start to get some of the big hitters posting first-quarter figures.
Markets will be paying particularly close attention to the US banks JP Morgan and Wells Fargo as they kick start the financials, while Johnson & Johnson, along with Intel, will ensure it’s not just US bankers under the spotlight.
Negativity from commodity traders
This morning’s overnight Chinese trade balance figures have once again seen scepticism increase with commodity traders struggling to believe that the better days are just around the corner. Chinese government promises that multi-trillion US dollar infrastructure spending programmes were coming have yet to materialise and their absence has seen a shortfall of bullish enthusiasm.
EUR/USD selloff continues
Regardless of the fact that there is limited movement in equity markets and an almost non-existent diary of economic data today currency markets have decided that a continuation of EUR/USD selloff is warranted.
With the dollar strong against almost every other major currency it is slightly baffling that the selloff in GBP/USD has not garnered a little more weight from an enthusiastic momentum trading community. Ably demonstrated from the conflicting polls this weekend, a lack of clarity and therefore looming uncertainty should be coming the way of the UK soon.