Market update

11/07/12 - 1400

Chris Weston - chief market strategist
 

US futures pointed to a higher open on Wall Street, with the NASDAQ 100, S&P 500 and Dow all up around 0.4%. Investors hope the minutes from last month's FOMC meeting, due this afternoon, will signal that more QE is underway.

The austerity measures announced earlier today by Spanish PM Mariano Rajoy also boosted risk appetite.

The Fed had decided at its meeting in June to extend the Operation Twist programme until the end of the year. It also said that the central bank was ready to take up further measures if the US economy deteriorates further. The minutes will provide investors with further insight as to how the Fed intends to stimulate growth and some analysts are speculating that the Fed will introduce further easing measures as early as August.

Meanwhile, investor sentiment also improved after Mariano Rajoy announced Spanish cuts and tax hikes amounting to €65 billion to honour its obligation to reduce the budget deficit.

On the macro front, US trade balance figures for May are due for release at 1.30pm (London time), while wholesale inventories for May are expected at 3pm. The trade deficit in the US is expected to narrow to $48.6 billion from $50.1 billion in April.

See what our insight, news and analysis centre can do for you.

IG provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. This communication must not be reproduced or further distributed.