Again the price action, particularly on Wall Street, was quite telling, and after earlier losses the US stock markets bounced back paring most of their earlier falls. This rebound was not enough to save European bourses from posting declines on the day, despite the UK economic data being by far the strongest of economic releases. The reaction by investors to falls and disappointing news continues to confirm the power of the third wave trend, with investor’s using any dip as a buying opportunity.

Today, the attention focuses on the ECB and the MPC when they release there rate decisions at lunchtime. No changes in official rates are expected at either meeting. There is also little expectations that the ECB will change its rhetoric. In the UK, the focus is on what the MPC could announce regarding QE. The market appears split on whether they will write to the Chancellor asking for an extension or they bring a stop to the process and monitor the results. Given the strength of economic data releases, particularly over the past two weeks, the latter now seems slightly more probable. For the UK bond market, a clear message will also be vital given the recent somewhat conflicting news from the different MPC officials.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.