THE FTSE ended last week pretty much where it started, and the rut that is the 4,400 to 4,500 range is becoming somewhat entrenched. This morning’s call is for a mildly positive start, with GFT quoting the FTSE 100 to open up 14 points at 4,456, with the momentum coming from US markets where a late post-Europe close on Friday took the Dow into positive territory for the year. The French CAC is expected to open up 7 points at 3,333 and the German DAX is seen opening around 5,078, up 19 points.
There’s a heap of macro and micro economic events to provide direction this week to help break stock markets out of their ranges. Although inflation is widely viewed as a sleeping giant for the future as a result of the massive quantitative easing policies, market reaction to this week’s Consumer Price Index data from the UK, Eurozone and the US will probably see higher-than-expected numbers as yet another reaffirmingly positive sign that an apparent economic recovery is still very much a reality. GFT’s inflation futures show we can expect a year-on-year CPI in the UK of 2.15 per cent for May on Tuesday, and 0.13 per cent for the Eurozone. Also on Tuesday, the “Zew” German economic sentiment survey is surveyed to post an eighth consecutive rise. Wednesday’s Bank of England minutes from the meeting held earlier this month may lend some clues over future interest rate direction.