The UK index opened the day at 7460, having touched the 7470 level in pre-trading, maintaining the levels it saw at yesterday’s close.
Spreadex Analyst, Connor Campbell noted – “The index is still being propped up by its commodity stocks, though at an admittedly reduced pace, with the oil and mining sectors still high on Brent Crude’s recovery and the $900 billion ‘Silk Road’ infrastructure plan in China.”
However, the FTSE won’t have an easy ride this morning as it deals with the latest piece of inflation data. Analysts are expecting the figure to hit 3.5% – adding to the pricing squeeze for consumers. The core CPI number is forecast to jump from 2.3% to 2.6% month-on-month – a reading that would be the highest in more than 3 and a half years.
Connor Campbell added – “In theory this would inject a bit of life into the pound – which is currently up 0.3% against the dollar but down 0.1% against the euro – and could, potentially, cause the UK index to fall from its current peak. It will be a test of the FTSE’s resilience to see how it copes with this challenge, and may help indicate the longevity of these highs going forwards.”
Over in the Eurozone, the region will get to digest its own set of data. The latest GDP reading is forecast to remain unchanged at 0.5%, while the German and Eurozone-wide ZEW economic sentiment figures are set to climb to 22.3 and 29.1 respectively. The DAX and CAC have started the day flat suggesting investors aren’t excited by the prospect. It does seem to have pleased the euro though, which crossed 1.10 against the dollar with a 0.4% rise.
Yesterday, US equity markets closed sharply higher, with both the S&P 500 and the Nasdaq returning to record highs.
Accendo Markets Analyst, Mike van Dulken noted – “strength in the Tech and Materials sectors offsetting Telecoms weakness following the global cyber-attack on Friday. Rising crude oil prices helped to encourage appetite for stocks such as Caterpillar and Chevron, while outperformance for large-cap Tech stocks, such as Facebook and Alphabet, inspired strength across the sector.”
He added “This afternoon, US Housing Starts and Permits are expected to show flat Permit growth on last month while Starts rebound strongly from their weakest in four months. US Industrial Production is seen reporting another strong month, Manufacturing rebounding, while Capacity Use rises to its highest since late 2015.”
