Joshua Mahony MSTA
Scope Markets
• FTSE flat after volatile week
• Potential Saudi-Iran deal lifts hopes
The FTSE looks likely to close out the session with a surprisingly low-key end to what has been a relatively volatile week. With both the BoJ and FOMC now behind us, the focus is back on data as a driver of investor sentiment. The latest PMI data from the eurozone certainly tells a story of a continued divergence between the haves and the have-nots, as both the composite and services PMI figures fell despite gains for the major players like Germany.
Hopes of a potential deal between Saudi and Iran at next week’s oil-producers meeting saw crude prices surge today, with the idea of a production cut finally on the agenda. Bitter enemies Saudi Arabia and Iran are probably not the likeliest partners when it comes to finding agreement, which was reflected in the fact that initial gains have faded as the day wore on. However, should such a deal come to fruition, markets would certainly take any such production cut from Saudi as a sign that things are moving in the right direction. Despite this, the cynics amongst us would note that actually this is doing little more than roll back the recent ramp up in Saudi production.
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