Markets remain calm ahead of raft of US news
- Article by: PAN PYLAS
- Associated Press
- January 29, 2013 - 4:33 AM
LONDON - Markets were relatively becalmed Tuesday for the second day running as investors awaited key data on the U.S. economy that could indicate whether the optimistic start to the year will continue.
Many stock indexes around the world have hit multi-year highs and the Dow Jones industrial average is not far off its all-time peak, achieved in 2007 just before the financial crisis started baring its teeth.
One of the reasons why markets have enjoyed such a strong start to the year is optimism over the U.S. economy. Over the coming days, investors will be inundated with a raft of figures, culminating on Friday with the monthly nonfarm payrolls report for January. The payrolls figures often provide the markets direction for a week or two after their release.
In the run-up to that statement, markets around the world have so far traded this week in fairly narrow ranges, particularly in Europe and the U.S. In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,304 while Germany's DAX fell 0.1 percent to 7,826. The CAC-40 in France was 0.2 percent lower at 3,774.
There's a lot to get through before Friday, though, most notably on Wednesday when the U.S. Federal Reserve concludes its latest two-day policy meeting. At their last meeting, there were signs that some rate-setters were poised to bring an end to the era of super-loose monetary policy.
"The Fed statement tomorrow is likely to be the most eagerly anticipated news of the week," said Rebecca O'Keeffe, head of investment at Interactive Investor.
Wall Street was poised for modest losses at the open Tuesday, with both Dow futures and the broader S&P 500 futures down 0.1 percent.
The main point of interest later Tuesday may be the monthly U.S. consumer confidence report from the Conference Board — particularly as the recent budget agreement between the White House and Congress has led to some tax rises.
U.S. earnings statements continue, with more than one-fifth of the companies in the S&P 500 reporting this week. Ford and Amazon are due to report Tuesday.
"Traders' resolve to keep building out this rally certainly has the potential to be tested yet again," said Fawad Razaqzada, market strategist at GFT Markets.
Earlier in Asia, Japan's Nikkei 225 index rose 0.4 percent to 10,866.72 but Hong Kong's Hang Seng slipped less than 0.1 percent to 23,655.17.
Japanese banks surged on expectations they will beat earnings estimates for fiscal 2012, the Nikkei newspaper reported. Mitsubishi UFJ Financial Group advanced 3.8 percent. Mizuho Financial Group gained 2.9 percent and Sumitomo Mitsui Financial Group rose 4.4 percent.
It was fairly quiet in other financial markets too, with the euro 0.1 percent lower at $1.3441 and the dollar flat at 90.51 yen.
In the oil markets, a barrel of benchmark New York crude was 15 cents higher at $96.58.
Pamela Sampson in Bangkok contributed to this report.
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