Monday, 31 October 2011

Mike Lenhoff: Market tactics 31 October 2011

Can equity markets retain their gains?  

Not only is this a busy week for economic data but, with much of it for the US and coming from market sensitive ISM surveys and Non-farm payrolls, it is one that will focus attention on how the US economy is stacking up for the final quarter of the year.

Although the FOMC and the ECB also meet this week no new policy initiatives are likely and nor is any change in the overall messages. However, the Fed has been expecting a better second half to this year than first half, something to which last week’s third quarter GDP data has already given support. A good start to the final quarter of the year with this week’s numbers could add a bit more conviction to the view that the economy is regaining momentum and that the risk of a US recession is diminishing.

Elsewhere, the call by the Presidents of the European Council and European Commission for a ‘renewed collective spirit of common responsibility and purpose’ at the G20 meeting later this week is likely to chime with David Cameron, who intends to set out his own thoughts on how best to push for a more balanced world economy.  More >

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