Weak US retail sales dampen to the market mood
|The FTSE is opening on the back foot after a lower close on Wall Street following weaker US retail sales. Signs that resurging covid cases and the lack of fiscal stimulus is impacting on the US consumer was enough of an excuse for vaccine optimism to fade and stocks to drift lower.
US retail sales rose just 0.3% versus 0.5% expected in October compared to the previous month. This was significantly lower than the 1.6% month on month increase seen in September and served as a stark reminder if it was needed that there will be a lot of economic fallout from the pandemic over the coming months before any vaccine is widely available.
The FTSE underperformed its European peers in the previous session and is heading in the same direction this morning owing to a stronger Pound. Given the high number of multinationals on the FTSE, a stronger pound is a less beneficial exchange rate for those earning abroad.
UK inflation lifts GBP
UK inflation picked up by more than expected in October even as large parts of the country headed back into lockdown. CPI rose 0.7% YoY and 0% MoM beating forecasts of -0.1%. Whilst food, furniture and clothes saw prices rise as summer sales items were replaced by full priced autumn ranges, unsurprisingly leisure activities and transport negatively impacted price growth.
The Pound is building on gains from the previous session as Brexit optimism remains a firm support of Sterling. As talks continue between the EU and the UK and rumours swirl that a deal could be ready as soon as Monday or Tuesday next week.
Oil gains capped on OPEC indecision
Oil is holding steady on Wednesday after API data late on Tuesday showed that US crude stockpiles rose by 4.2 million barrels last week, significantly ahead of expectations of 1.7 million barrels. The data came after OPEC+ meeting where no formal agreement was made to reverse its plan to boost output by 2 million barrels a day in January, ahead of a full OPEC meeting at the end of the month. This could cap any gains in oil. The last thing the oil market needs in this lockdown winter will be 2 million more barrels a day of supply.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.