Market Comments

Heading into the close the FTSE 100 looks a lot more secure, up 20 points and pushing back in the direction of record highs.

UK markets

London’s leading index once again tested 7100 today, but for the moment remains trapped below. This has not been due to a lack of corporate data however, which has been coming thick and fast from both the UK and US. Top of the list has been Sky, after the morning’s results showed that its decision to shell out cash by the bucket load for Premier League rights had paid off. Fears of customers deserting in droves as a result of higher prices were ill-founded, allowing the shares to race higher. Eurozone markets are looking reasonably strong too, although the DAX is still having trouble breaking and holding above 12,000. This burst of optimism comes as the screws turn on the Greek government, which finds itself more strapped for cash by the day. This gives Athens a weak hand in any negotiations, but investors can clearly see the positives in this, since a deal is made more likely if Greece feels there is no alternative. The eurozone looks set to limp on intact, at least until the next crisis.

US markets

Aside from the NASDAQ, US indices have struggled to duplicate the positive session we saw yesterday. Today’s earnings reports have continued to focus on the stronger dollar as a reason for weaker performance, although the data so far on bottom line earnings has been broadly better than expected. Unfortunately the tone for the coming quarters has not been resoundingly optimistic, so there have been few reasons to follow up on yesterday’s gains. The 2100 level continues to spook the S&P 500, but there is still plenty of time for this earnings season to turn into something a lot more positive, particularly as the tech giants line up for earnings this week.

Commodities

Gold continues to tread water in the area around $1200, as the pace of Fed interest rate increases remains the determining factor. Meanwhile oil prices are still edging lower, although they have yet to show the vigour on the downside they so effectively displayed during the rally in the first two weeks of April.

FX

An abatement of Greek worries lifted the euro from the day’s lows, while over-eager sterling bears were sent packing very swiftly. Yesterday’s firmer dollar seems a distant memory, but this still looks like a brief respite for both the euro and the pound. All moves in the latter should be treated with caution ahead of the latest set of MPC minutes this week, while the UK election continues to hover in the background as a major headache for anyone foolish enough to attempt a prediction on the UK’s economic direction post 7th May.