Stocks are flat this morning. The FTSE 100 trades north of 7,900 having finally broken higher to catch up with its peers after its best week in a while saw it come close to the all-time high. Maybe it’s the end of the tax year. Oil has come off its roughly four-month high. US stocks rose 2-3 per cent last week, the Dow having its best week since December, but the market is expected to be flat when it opens later on today.
Dispute the calm there are some big movers in London this morning. Direct Line shares are down 14 per cent after fellow insurer Ageas said it wouldn’t make another offer. Direct Line’s board has already rejected two approaches from the company. Ageas shares rose after the news broke. Elsewhere, Mobico, formerly known as National Express, said an accounting review of its German business would hit profits this year, sending shares down 10 per cent.
For the most part, rate decisions are behind us and now it’s the turn of the inflation data. US core PCE inflation data will be the week's big event as markets continue to react to last week’s Federal Reserve decision and other central bank calls. Japanese and Australian inflation figures are also due up after their respective central banks met last week. We also have some useful US economic data – GDP and durable goods for instance.
There is a clear sense that central banks are now very much onside for risk. They won’t stretch for that last mile. And even the Bank of Japan is not really tightening.
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The Trader is written by Neil Wilson, chief market analyst at Finalto
