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Reports UK

UK stock market commentary (August 13, 2014)

August 13, 2014, Wednesday, 05:54 GMT | 01:54 EST | 10:24 IST | 12:54 SGT
Contributed by Capital Spreads

European equities are set to edge higher on the open as concerns over the Russian aid convoy die down. The FTSE would also be up on the open this morning but a large amount of companies are going ex-div shaving 22 points off the index.

Initial concerns that the Russian aid convoy was just a Trojan horse move by the Kremlin have eased now that authorities in Kiev have come around to the idea of receiving the supplies. However, there’s a lot of confusion to exactly what Kiev has agreed to with some media outlets reporting that the supplies must be handed over to the International Committee of the Red Cross at the border for them to distribute, whilst other sources are suggesting that the whole convoy will be allowed in as long as it is accompanied by the Red Cross.

It may seem a minor administrative point but considering that Andriy Lysenko, a spokesman for the Ukrainian National Security and Defence Council, said that the convoy wouldn’t be allowed on Ukrainian territory, there are already a few jitters amongst traders that when Ukraine’s border guards and the Russian convoy butt heads, this could be used as the pre-text for something much bigger.

The Dow has yet to find a direction this week trading in a tight range. However with some solid figures including a 13 year high in job openings as well as a positive figure expected for today’s retail sales, sentiment would favour the bulls. Investors will be quietly confident with one eye still on activity in the Middle East.

Not great news for all concerned within the Eurozone. Figures today showed the European economy is far from its recovery target, with poor investor confidence in Germany and Italy also claiming it had entered a recession. All eyes will be on Mario Draghi and the ECB to find a solution. EUR/USD maintains a downward trend and currently trading around the 1.336 mark.

WTI price would be reflected in the supply report given yesterday. And with U.S supplies increasing, WTI for September delivery fell a considerable 25 points to $97.13 a barrel. The supply line seems sufficient for now, but traders will surely have one eye on any Middle East supply threats.

Gold has held its levels this week, currently trading just shy of a 3 week high, with investors taking stock of multiple economic factors including the strong dollar and conflicts in the Middle East as well as falling demand in China. Currently trading $1310.3.