MARTIN ON THE MARKETS

AFTER three months of virtually non-stop rallying, are the brakes finally on? Despite a US data-led push ahead on Friday, the FTSE 100 index still finished the week down nearly 100 points. Even Friday’s fight-back may be tested this morning following a fade in US stocks after London’s close. GFT is calling the FTSE to open down 12 points today at 4,333. The German DAX is expected down 9 points at 4,830 and the French CAC down 14 at 3,207.

MARKET DRIVERS THIS WEEK
So was last week an overdue bull market correction or the beginning of the end of a drawn-out bear market rally? There is a host of US data this week to help the market make up the its mind. Wednesday is the main draw with not only the Fed’s manufacturing activity index, but also durable goods orders, which jumped higher than expected last time, and the FOMC’s rate meeting also finishes then. Although rates are almost certain to be left unchanged in the zero to 0.25 per cent range, with many starting to price in the possibility of a fed hike before the end of the year, we are on Fed Watch for any shift in its policy bias. The economic data continues from the States on Thursday with GDP expected to show a 5.7 per cent decline.