Traders tentative ahead of US data

In mid-morning trading the FTSE 100 is up five points, as markets tread water ahead of crucial US economic figures.

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.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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