Asian stocks moved higher last night following falls yesterday over fears of a Chinese slowdown, with the Shanghai Composite up around one per cent, and the Hang Seng up around 1.5 per cent.
However, significant gains have been held back by the political crisis in Portugal with ministers resigning and prime minister Pedro Passos Coelho under pressure to step down (which he has resisted so far). The situation has caused Portuguese bond yields to jump and its stock market to fall, and many are afraid of the crisis spreading out of Portugal into other European countries including Spain and Italy.
In addition, many investors are awaiting US jobs data coming out on Friday, with particularly strong results signalling a possible scaling back of quantitative easing in the near future – with unemployment being one of the factors that the US Federal Reserve is using to guage its timeframe.
The Nikkei, meanwhile, fell slightly, closing 0.26 per cent down, just above the 14,000 mark.
It's Independence Day in the US today, so expect trading volumes to be low. The FTSE ended 1.17 per cent down yesterday on fears surrounding geopolitical instability in Portugal and Egypt, and there may be some bargain hunting going on today - although any gains will be subdued ahead of US jobs data.
No consistent July 4 UK trend. Since 2000 #FTSE 100 up 5 and down 8 when US closed for Independence Day holiday— david schwartz (@schwartztrends) July 4, 2013
Cable $1.5258, €/$1.2994, $/¥99.84 - Gold $1256.27, Nymex $101.34, Brent $105.50 - Europe opening cautious - FTSE +13, DAX +21, CAC +11— David Buik (@truemagic68) July 4, 2013
Key events today:
0800: Halifax house prices (June)
0900: Italy public deficit/GDP ratio (Q1)
1000: Eurozone GDP (Q1)
1200: Bank of England Monetary Policy Committee interest rate decision
1245: European Central Bank interest rate decision
1330: European Central Bank monetary policy statement and press conference
2235: Question time (last before summer break), panel includes Danny Alexander and Margaret Hodge