FTSE falls as sellers return

The FTSE is back in the red, as the tumble from near all-time highs continues once more

• Sellers return as FTSE falls

• Bond yields on the turn

• Markets focus on US GDP data

Markets cannot seem to catch a break at the moment, for with every rise comes an inevitable drop. Despite a strong end to the day yesterday, crude prices are once more coming under pressure, with lingering doubts over whether the OPEC production cut will ever come to fruition.

Bond yields are on the rise, following on from an incredible multiyear period of strength in bond prices. In an environment of rising inflation, and an increasingly likely US December rate hike, there is a chance that we will see yields continue to rise for some time yet. Coming at a time when stocks are tumbling, this highlights that the move out of bonds is more to do with economics (which often move inverse to the FTSE) than risk attitudes.

Today will see markets turn towards the US, with Q3 GDP providing one of the key signals over whether December remains feasible for the Fed to hike. The estimated growth rate of 2.5% would certainly be a boon, raising the chances that Fed members perceive the US economy as strong enough to withstand a bout of gradual monetary tightening. In any case, todays likely dollar volatility should see the FX markets close out the week in style.

Ahead of the open we expect the Dow Jones to open 30 points lower, at 18,140.