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European markets have been remarkably buoyant ahead of tomorrow’s European Central Bank press conference, as speculation over policy changes and interest rate cuts has been rife. Once again the troika has brought trader focus back to Greece's need for further bailout funding and the ubiquitous protesting on the streets of Athens.
EU markets bolster UK
Following yesterday’s correction the FTSE 100 has been considerably more resilient, edging higher encouraged by the performance of the European markets. UK factory production has added to the general perception of an improving UK economy.
Experian has seen its shares battered following the announcement it will halt its $500 million share buyback programme.
Political interference looks to be causing BAE Systems issues as it struggles to decide where to base its long-term shipbuilding site. Fears over Scottish devolution are a consideration, and chances of Glasgow’s Govan site being the primary dock have increased along with political pressures.
Persimmon has announced that, due to the high rates being charged to home buyers using the government's mortgage guarantee scheme, they are yet to see any significant benefit. This has disappointed the markets somewhat.
US buyers unaffected by tapering uncertainty
The debate continues over when or if the US Federal Reserve should begin to taper its current bond-buying policy, and confusion caused by the recent government shutdown and inaction over the debt ceiling has ensured there is no unified opinion. This has not dampened buying sentiment, however, as we see the Dow once again make a charge for all-time highs, closely followed by both the S&P 500 and NASDAQ.
With less than 24 hours before the start of trading in Twitter, the IG grey market is still seeing healthy two-way action. Buyers and sellers have been jostling for position, and are indicating a $43 share price by the close of the first day's trading.
Elsewhere in technology news, Microsoft has come up with a short list of who could take over as the new CEO replacement.
Gold pushes through
Over the last 48 hours, gold had looked like it was going to give up the fight and head back below the $1300 level – however it has managed to harden its resolve and has popped back up to $1320. How long this resilience lasts for could well be dictated by economic events between now and the weekend.
Surprisingly good German factory orders have failed to shake copper out of its tight trading range, and the lateral trading pattern looks like it will be in place for some time to come.
FX pairs bounce
German factory order numbers have, on the other hand, helped see the EUR/USD pairing bounce off the 1.35 level, and a bounce above the 1.3525 region could see technical traders add to the move. Speculation surrounding the ECB’s decision to cut EU interest rates has added to confusion, however such swift decisive action has not historically been part of its remit.
GBP/USD continues to bounce from its recent lows of 1.59 and at this rate a retest of the 1.6250 looks on the cards.