Stocks looking higher for now but resources the key

UK and European stock markets are set to open higher this morning, following on from Friday&rsquo;s bounce-back from the initial sell-off which followed the all-important US employment data. <br /><br />GFT is quoting the FTSE 100 index to open up 24 points from Friday&rsquo;s close of 5,142. The German DAX is also called higher, up 25 points at 5,503, and the French CAC is forecast to open up 13 points at 3,720.<br /><br />The UK index managed to end the week on a reasonably firm note after the details of the non-farm payroll data were fully digested, and we see that momentum dominating the market&rsquo;s initial direction on a day which is otherwise short on economic news. <br /><br />Down-side pressure, if any, is most likely to come from oil; Brent futures ended down over $2 on Friday in reaction to the US unemployment rate breaking through the 10 per cent level, and if the market is looking for an excuse to sell off then continued lower oil prices or profit-taking on the miners could well take their toll on the raw material-concentrated FTSE. <br /><br />Tomorrow the British Retail Consortium is expected to report a fairly positive report on retail sales, but the one to watch this week as far as economic releases are concerned is the Bank of England inflation report on Wednesday. <br /><br />The Bank&rsquo;s governor, Mervyn King, will be expected to provide some insight into the rationale behind the additional &pound;25bn in quantitative easing announced by the Monetary Policy Committee last week. The general consensus here is for a relatively optimistic outlook to be provided. <br /><br />On the corporate side, some stimulus could be provided tomorrow, with trading updates due from HSBC, Barclays and Vodafone. But overall it&rsquo;s a quiet week for macro and micro-economic releases, so it&rsquo;s likely that the push up or down will come from commodity stocks, with all eyes on gold. December gold futures breached $1,100 an ounce on Friday. <br /><br />Martin Slaney is the head of derivatives at GFT