FTSE 250 surges to new highs

The FTSE 250 has outshone its bigger brother, on a day where news stories are few and far between. Will the OPEC report provide the spark markets are looking for?

• FTSE 250 clocks up new highs

• OPEC report to grab the limelight

• Japanese GDP highlights fallacies of Abenomics

Today looks like providing a relatively calm day for markets, with the economic calendar featuring precious few events of note. The early gains seen in the FTSE are fading somewhat, with marginal upside across Asian equities reflecting the indecision we are seeing today. However, we are seeing the FTSE 250 reaching a fresh record high this morning, throwing off any fears of economic peril upon activating Article 50 next month. The fact that the FTSE 250 is more domestically focused means there are a greater degree of firms which will be benefitting from greater international competitiveness thanks to a weakened pound.

The focus for many will be OPEC’s report, due out this morning. To some extent, we have already seen the IEA shed light on the state of the output cut, with an impressive 90% conformity rate being enhanced by bigger than planned reductions in nations such as Saudi Arabia and Venezuela. The direction of crude is largely going to be dictated by which comes first; a sharp rise in US production, or an extension/increase to current cut levels.

On a day largely devoid of any economic data, traders are paying particular attention to the Japanese GDP reading out late on Sunday evening. Coming at a time when Shinzo Abe wraps up what has been a largely positive trip to the US, the Japanese GDP reading for Q4 deals a blow to an economy which is struggling to prove the longevity of Abenomics initial success. Inflation has largely halted and with growth falling back to a rather moderate 0.2% for the quarter, there is reason to believe that Japan needs another shot in the arm which could prove relatively elusive given the already stretched nature of the BoJ’s monetary policy.

Ahead of the open we expect the Dow Jones to open 36 points higher, at 20,305.