Calmer assessments of Arabian Gulf military action have seen a more measured reaction from European equities as they open at a lethargic pace.
The City, much like the rest of the UK, is this morning trying to digest last night’s grilling of both David Cameron and Ed Miliband by Jeremy Paxman, and who came out on top. Certainly as far as the IG binary on the matter is concerned, it is still suggesting David Cameron has a 63% chance of remaining Prime Minister, but gaining a majority still looks a long way off. The second day of speeches in Frankfurt will see both BoE governor Mark Carney and FOMC voting member Stanley Fischer speaking on ‘debt and financial stability’ as they expand on their cautionary comments from yesterday.
The return of dollar strength has seen commodity prices take a tumble, and subsequently the heavy weighting of the mining sector in the FTSE has seen it struggle to keep pace with more sprightly European equity markets. Oil prices have cooled overnight too, as the initial panic over the consequences of Saudi Arabia’s military action in Yemen and the harm it might cause its oil distribution have failed to materialise. Shares in Barratt Developments have scarcely missed a beat after the news that finance director David Thomas has been promoted to CEO following the end of Mark Clare’s nine-year stewardship of the company. The promotion from within will give the markets confidence in the UK housebuilder’s ability to maintain the strong performances of recent years.
Economic data is back in the focus for US investors as the final revision of Q4 GDP figures are released along with the latest University of Michigan confidence data. Once again Janet Yellen will be speaking, this time in San Francisco with ‘The new normal for monetary policy’. Considering the significant interest in the presence of ‘patience’ in her last major speech this should enable her to be more fulsome in her use of phraseology. As the dollar is again moving higher and squeezing US exporters, some time spent addressing this matter would be keenly anticipated.
Ahead of the open we expect the Dow Jones to start 37 points lower at 17,641.
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