New York: 04:30 || London: 09:30 || Mumbai: 13:00 || Singapore: 15:30

Reports UK

UK stock market commentary (May 21, 2014)

May 21, 2014, Wednesday, 06:13 GMT | 01:13 EST | 09:43 IST | 12:13 SGT
Contributed by Capital Spreads

European equities are set to dip on the open as the hangover from yesterday’s decline ensues. With the markets clearly stalling once again at key technical levels the question of how low will we go is now the main topic of trader mutterings.

Central banks could be the source of volatility today as the BoJ concludes its meeting and minutes are out from the BoE and Fed. Although policy continues to be dovish at the BoE and Fed, the downside risk is that even the mere hypothetical discussion of anything hawkish may cause traders to conclude that a tightening of policy is coming sooner than hoped.

Stocks finished a lot lower on Tuesday as many retailers reported disappointing results. Staples and Urban outfitters were among those that concerned investors regarding the outlook for the retail sector. However, in the last month or so, when the Dow comes down to these levels it normally attracts the buyers, let’s wait and see how it reacts today. Yesterday the Dow Jones fell a hefty 137 points to close at 16,374.

The euro still won’t budge against the dollar. It is hovering just above the 1.37 mark where it has now spent the majority of the last week. However, traders need fear not as the FOMC minutes are upon us this evening and it is possible that the pair moves as violently as it did two weeks ago when Mario Draghi laid out his feelings on the Eurozone.

The run for oil continues. Yesterday, the WTI contract for July delivery settled up 22 cents at $102.33. The good news for investors doesn’t stop there either as US crude has gained another 60 cents overnight on reports that oilfields in Libya are still closed.

Gold remained below the $1,300 yesterday as it awaits the minutes from last months Fed meeting later on today. The minutes should have a big impact on the precious metal as details of how the Janet Yellen and her troops expect to change monetary stimulus in the future. Hopefully we can expect some fun at last. Spot gold closed up $2 at $1,295.