FTSE starts on back foot heading into inflation data
EUROPE’S stock markets are going to struggle this morning against a strong headwind set by the Dow Jones Industrial index on Friday, closing as it did below the psychologically significant 12,000 level.
GFT quotes two-way prices on stock indices around the clock, even when the underlying markets are closed, but this morning’s open is looking like a close call.
Despite the negative direction lent by US markets on Friday, stocks still managed to claw their way marginally higher after Europe’s close.
The FTSE 100 index is called to open down five points at 5,760. The German DAX is forecast to open down eight points at 7,061, and the French CAC 40 is quoted to open down just three points at 3,802.
News from China on Friday that export growth at 19.4 per cent wasn’t as dramatically high as the previous month’s 29.9 per cent number – which investors seem to be translating into another blot on the landscape of global economic growth – was sufficient impetus for the wobble.
DOW’s BIGGEST SLUMP SINCE 2002
The Dow’s drop means that the blue-chip US index has now suffered its longest slump since 2002.
Comments earlier in the week from Federal Reserve Chief Ben Bernanke, that owned up to the reality that the recovery in America was “frustratingly slow”, hardly helped.
Traders of the UK index are unlikely to commit too much either way ahead of tomorrow’s inflation figures.
After the surprise leap in the Consumer Price Index up from four per cent to 4.5 per cent last month, this time the forecasts are generally shooting for inflation to remain stagnant.
This is a highly sensitive number for the UK markets and the slightest increase could well see the sellers pile in.
RPI inflation – the most familiar general purpose measure of inflation – is also forecast to see no change from 5.2 per cent.
Martin Slaney is director of global dealing for GFT