The FTSE was caught between two of its most important sectors this morning. The hefty mining stocks were all rouged up thanks to the Chinese central bank raising its short-term interest rates; the banking sector, on the other hand, was flush was positivity following reports that Donald Trump is seeking to repeal the Dodd-Frank Law.
This meant the UK index needed a nudge in one direction or the other, something that came in the shape of the latest services PMI. Falling to 54.5 from 55.8 month-on-month – with input prices continuing to creep higher, if not quite as fast as they did for manufacturers on Wednesday – the PMI caused the pound to drop by 0.4% against the dollar and 0.1% against the euro, giving the green light for the FTSE to post a modest 30-ish point rise.
Looking ahead to this afternoon and the Dow Jones futures aren’t giving away much ahead of the non-farm jobs report. For January wage growth is expected to dip from 0.4% to 0.3%, with the unemployment rate steady at 4.7%; as for the headline non-farm figure, forecasts suggest a solid 170k reading. However, with the ADP non-farm number surging unexpectedly mid-week, a big surprise could well be in order.
