UK markets
The 6400 level still remains something of a hurdle for the FTSE 100, even if this is currently more of a consolidation than the end of the jump higher that began last week. GlaxoSmithKline results, which included an uplift to the full-year dividend, helped the market to hang on to its gains for the day, dispelling some of the gloom from British American Tobacco’s cautious update this morning. Firm reasons to buy have been lacking and given the magnitude of the upward move in recent sessions most traders are now asking themselves where the next positive catalyst is coming from. On the continent, the DAX’s move back above 8900 puts it firmly in bullish mode, and a weekly close above here would put additional upside towards 9100 into the frame once again.
US markets
Gains on Wall Street have been tentative at best, despite earnings reports from the likes of Boeing that struck a more positive tone than those released 24 hours early. Yahoo is racing away after its well-received numbers last night, but for now a cautious mid-week pause is the order of the day. Even so, additional confident earnings numbers could still provide the basis for another move higher, with the S&P 500 still on course to challenge its long-term uptrend around the 1960 mark. Ten-year Treasuries are still holding up around the 2.2% yield, although the slightly stronger CPI number will have tempted a few more buyers in on expectations that the Fed is still mulling a mid-2015 rate hike
Commodities
What had seemed to be consolidation in the silver price has turned into a complete rout, with the price touching one-week lows. Traders took the opportunity presented by the touch of the July descending trendline as a textbook opportunity to sell the metal, presenting a stark contrast with gold, which has been buoyed by steady buying from Indian sources. Hopes of Chinese demand are supporting Brent crude for a second day, which in the context of Brent’s heavy downward move is actually quite an impressive rally. We are now looking for further moves higher in the direction of $88.20.
FX
A fractionally stronger US CPI reading provided the breathing space the US dollar needed to make up some lost ground against the euro, pushing the single currency back and inadvertently doing the ECB’s job for them. Downside potential in GBP/USD has been ignited by a rather dovish set of BoE minutes that shows policymakers are becoming increasingly nervous that a rate hike in the middle of next year could be premature. Only the Fed’s apparently simultaneous shift to increased caution has prevented the pound from dropping below $1.60 once again.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Recommended Content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.