Dollar bulls eagerly await Fed minutes

Early weakness in mining stocks on bad news from China has been reversed, with the FTSE 100 13 points higher in mid-morning trading.

-       FTSE steadies itself after opening drop
-       Kingfisher takes a tumble
-       Fed minutes to provide a boost to dollar?

London equities had a bit of a wobble on the open, as the downgrade of China by Moody’s caused heavy losses among the miners, but since then losses have been erased and another push to 7500 has been undertaken. Equities have been broadly stuck in consolidation mode for several days now, but the brief dips of the past two days have been met by buying, which is a positive sign. Broader commodity weakness is also weighing on the index, which will certainly find it hard to stage a bigger rally into fresh all-time high without the support of the heavyweight mining sector. Kingfisher’s results were keen to point out the strong performance from its Screwfix division, but it seems some DIY work is needed on the French arm, where sales fell dramatically. Improving eurozone economic figures would suggest that this problem is more related to Kingfisher itself than any problem with the broader French market, and this is perhaps why the shares have taken such a battering this morning.

Dollar bulls have been trying to arrest the decline in the greenback over the past two weeks, with little success, as eurozone data continues to flag up the general recovery in that part of the world. But today’s Fed minutes might provide them with the force they need to get the US currency moving higher again. If the minutes can paint a more hawkish picture, then we could see the dollar index get moving back towards 9800, while chances of a Fed rate hike in June will be given a polish. Ahead of the open, we expect the Dow to start at 20,945, up 8 points from Tuesday’s close.