A lower euro has supported European stocks on Thursday in the lead up to the policy meeting of the European Central Bank. European investors brushed aside weakness overnight in Asia brought on by Fed Chair Janet Yellen giving her strongest signal yet that the Fed is set to raise rates in December.
Parliament voting to extend UK airstrikes in the Middle East to Syria has not borne out any major reaction in financial markets with stocks higher, the British pound slightly lower and bond yields unchanged.
The FTSE 100 was moderately positive with consumer services stocks leading gains after a broker upgrade to Costa coffee-owner Whitbread (L:WTB) ahead of a trading update next week. A jump in the US dollar following Ms Yellen’s speech caused a drop in precious and industrial metals which is causing weakness in the mining sector.
The price of Oil has rebounded from five-year lows after a report indicated Saudi Arabia said it would back output cuts if they were supported by non-OPEC countries. The Saudi’s slight concession makes a cut at Friday’s meeting very unlikely since Russia, the biggest non-OPEC oil producer is not yet on board, but does raise the possibility of it happening next year.
Shares of Barclays (L:BARC) are slightly positive on news the British bank is offloading its Italian retail business. The negative is that the sale of the business means taking a loss but it’s a step in the right direction for Barclays refocusing on core, top performing assets.
US stocks are set for a strong open on Thursday as energy prices spring back and investors take well to the idea of the normalisation of interest rates. Earnings are expected from Dollar General (N:DG), Kroger (N:KR) and Express.
USA pre-opening levels
S&P 500: 15 points higher at 2,094
Dow Jones: 136 points higher at 17,865
Nasdaq 100: 38 points higher at 4,724
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