FTSE readies itself for Autumn Statement as Dow hits new high

As the FTSE recovered yesterday after its oil-inspired plunge at the start of the week, the UK index again opened down today, as the looming Autumn Statement caused investors to be wary of the FTSE’s short term health.

The UK market opened at 6733.8 after closing at 6744.2 last night. However, better-than-expected services PMI numbers of 58.6 caused the FTSE to rally slightly this morning. Yet with George Osborne expected to concede that this Conservative government has missed its budget goals in the face of slow growth, and reaffirm his commitment to austerity if the Conservatives are re-elected next year, there may be further volatility in the FTSE this afternoon. The admittance of weakness in the UK economy, and a nod to potentially a continuation of the austere financial program that has been in place for the last 5 years will send shudders through the FTSE, and may further spook investors.

The Eurozone is also looking towards a big announcement, as it prepares itself for an ECB conference tomorrow. With the Eurozone’s final services PMI coming in at 51.1, its lowest in over a year, there will be increased pressure for Draghi and co to finally provide an indication of when and how Eurozone stimulus will appear. The overall negative sentiment wafting out of Europe led the DAX to open 10 points lower at 9956.2. Despite Germany’s reluctance to approve quantitative easing, the country’s markets, alongside those of France, Italy and Spain, reflect the need for some kind of ECB intervention.

As has been the trend recently, the Nikkei failed to hold onto the gains it had made on Tuesday, regressing to an open of 17792.5 and a close of 17752.5, as the yen continues to struggle against the dollar, with the greenback stabilising around 119.4. Any wobbles from Japan before the election in 11 days could easily see the dollar reach the 120 level it has been threatening to hit for the past month.

After a disappointing Monday, the Dow Jones managed to reach another record high yesterday, closing at 17,879.55, alongside hitting an intraday all-time high of 17897.05.The US markets will be looking to the ADP non-farm employment change as an indicator of Friday’s government released figure. Forecasts are predicting that this number could be lower than last month’s, so the Dow may have a volatile afternoon ahead.

This afternoon also sees the US announce its crude oil inventories, a figure that will be of much interest to Brent Crude oil. The commodity opened marginally higher than its Tuesday close at $71.04 per barrel, as reports of the depths of OPEC’s split come to light, alongside an unplanned OPEC drop in production due to the faltering recovery of Libya. With two factions at war within the oil cartel, there may be hope yet for oil if the production-cut cabal can win out.