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Europe quiet as Catalonia mulls its fate

Uncertainty still hangs over Spain as Prime Minister Mariano Rajoy has given Catalonia five days to make up its mind over independence.

The ball in now in the separatist’s court, and given the update from the Catalan President, Carles Puigdemont on Tuesday, it doesn’t appear that he is too keen to unilaterally declare independence. Mr Puigdemnt risks having direct rule being imposed from Madrid, but then again, he may secretly desire that in order to stoke nationalist tensions. The IBEX 35, along with other major European indices is slightly lower on the day.

Booker Group has a respectable first-half, as sales rose by 2.5%, pre-tax profits were up 9% and the interim dividend was upped by 10%. The company expects to complete its merger with Tesco in early 2018. The business is robust and it is doing very well for the retail sector. Booker Group won’t be making any forecasts while the Tesco offer is ongoing. The shares are fractionally lower on the day, but the stock has been broadly pushing higher for the past three years, and it could retest its all-time high of 218.5p.

The GBP/USD and EUR/USD are both higher in the wake of the Federal Reserve minutes being release last night. The US central bank appears to be on track to hike interest rates in December, which traders were half expecting going into the announcement. US inflation is noticeably lagging when compared with other economic indicators, and for that reason, traders are questioning how many interest rate hikes are in the pipeline for 2018.

European Central Bank (ECB) President, Mario Draghi,, and Fed members Lael Brainard and Jerome Powell are due to speak in Washington DC at 3pm (UK time).

We are expecting the Dow Jones to open 16 points lower at 22,856, and we are calling the S&P 500 down 4 points at 2551.

Citigroup and JP Morgan will announce their third-quarter results today. 

At 4pm the energy information agency (EIA) will report the latest US oil inventory report, and the consensus is for a decline of 2.35 million barrels, and that compares with last week’s decline of 6.02 million barrels.

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