FTSE set to drop as Dow has worst losses since 2004
THE FTSE is set to take a negative steer from the US this morning, with the Dow Jones blue chip index hitting the headlines for all the wrong reasons in the weekend press, having hit its worst losing streak since 2004.
In out-of-hours trading, GFT is forecasting the UK index to trade lower from Friday’s close by about 25 points, at around 5,930. European bourses are also expected to start the week lower, with the German DAX called down 30 points at 7,079 and the French CAC quoted down 16 points at 3,874.
The benchmark US index closed down nearly 100 points on Friday, following the key government jobs report which showed non-farm payrolls rose at a much worse level than was anticipated, and US shares lost further ground after the European markets closed.
Growing unrest in Saudi Arabia neighbour Yemen is also going to add some investor uncertainty to the mix today, and energy prices are facing another choppy week.
Interest rate decisions are due from both the Bank of England and the ECB on Thursday.
Still no change is expected in the UK, with this the first meeting since Andrew Sentance departed, who had voted for a half-point increase in May.
Most analysts are pushing out their forecasts of the timeline for an increase in base rates out to next year.
In Europe, a rate hike is expected to be signalled. The announcement late on Friday that Greece would receive its next €12bn (£10.7bn) installment of its bailout as early as July will have eased fears of a default, although longer-term concerns will no doubt persist.
Martin Slaney is director of global dealing for GFT.