FTSE 100 stumbles but Dax and S&P 500 keep rising

Chris Beauchamp IG

Investors await news of the French government this afternoon, while watching the year’s strong performers make yet new highs, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

FTSE 100 edges back after strong run

The FTSE 100 has enjoyed a decent couple of weeks, but it looks like it has run out of momentum for the moment. A dearth of corporate news isn’t helping matters either. Meanwhile, investors can be forgiven for focusing on France, where the prime minister faces the likely collapse of his government.

While the CAC40 has managed to struggle higher of late, the contrast with a soaring Dax could not be more stark. The latter index has gained over 20% this year, but it is perhaps more a story of French weakness than overall German strength. Certainly, the German economy continues to struggle, but it is political turmoil and the travails of the luxury sector that has hobbled its Gallic counterpart’s stock market.

Semiconductor names show signs of life

Having notably underperformed the broader US indices of late, it might be the turn of semiconductor stocks to lead the drive to fresh highs once more. It’s not as if US indices have needed much help given the latest record highs, but with the Fed continuing to ease policy, the environment for the classic risk-on sector seems to be getting brighter.

Author

Chris Beauchamp

EUR/USD bounces off lows, back to 1.1860

EUR/USD now manages to regain some balance, retesting the 1.1860-1.1870 band after bottoming out near 1.1830 following the US NFP data on Wednesday. The pair, in the meantime, remains on the defensive amid fresh upside traction surrounding the US Dollar.

GBP/USD rebounds to 1.3660, USD loses momentum

GBP/USD trades with decent gains in the 1.3660 region, regaining composure following the post-NFP knee-jerk toward the 1.3600 zone on Wednesday. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold stays bid, still below $5,100

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of humble gains in the US Dollar and firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.