Equities pare back recent gains

Chris Beauchamp IG

Stock markets have moved back into the red in early trading, with a 50 point drop for the FTSE 100 coming despite good news from plumber Ferguson.

Equity rally stalls.
Investors await US presidential debate.
Ferguson sees modest recovery ahead.

After the gains of Monday, Tuesday has seen a more cautious approach among investors, with little desire to drive markets higher after the impressive rebound seen since Friday. This may well be just a pause for breath, since stimulus talk in Washington continues to provide a more positive foundation for markets after the uncertainty that prevailed in September. The mood of company updates this morning has been fairly gloomy, with Shell, Greggs and Card Factory have reminded investors of the hard work that lies ahead, with sales likely to remain depressed and pressure to cut costs and jobs mounting. The impending US presidential debate is also providing an excuse for traders to sit on their hands, although the long-awaited confrontation is unlikely to provide more than lots of heat and not very much light.

It wasn’t all bad news on the company front – Ferguson was able to bring back its dividend and make the right kind of noises about modest growth in the US to boost its shares by around 5% in early trading. This builds on an existing rally from the March lows that has seen the company decouple from the FTSE 100 and push past its February highs. It is a useful reminder that while the index as a whole is a poor performer, there are pockets of growth if investors are prepared to look hard enough.

Ahead of the open, we expect the Dow to start at 27,568, down 16 points from Monday’s close.

Author

Chris Beauchamp

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.