FTSE Higher on Weaker Pound & Stronger Commodities

The FTSE traded higher out of the blocks following a mixed session on Wall Street and strong trading in Asia overnight. A rally in commodities saw the energy sector take top spot in Tokyo, whilst the metal and mining sector hit a three-month high in Australia.

Crude continues to trade at 3 ½ year highs on optimism that the global supply glut is coming to an end, following another drawdown on US supplies. Miners traced metal prices higher, with Aluminium at a 6-year high, up 32% just this month, whilst nickel has surged 20% this week alone as concerns over Russian sanctions and supply issues dominate. As a result, heavily weighted commodity stocks are dominating the upper reaches of the FTSE, lifting it higher in conjunction with a weaker pound.

Retail sales disappoint

The pound is down for a third day, falling sharply and piercing $1.42 after retail sales disappointed, making it a hattrick of misses for British data this week. After disappointment from wages growth and inflation, retail sales fell -1.2% month on month in March, well short of expectations of a -0.6% decline. On an annualised basis, sales grew just 1.1%, missing the 1.4% forecast.  Whilst temporary factors were the principal reason for the slowdown in sales as the Beast from the East and Storm Emma kept shoppers inside, online volumes also dropped suggesting the squeeze being felt by the consumer remains a relevant factor.

BoE to hike in May?

After hitting $1.4377, its highest post Brexit vote level on Tuesday, GBP/USD is now trading close to 200 pips lower at $1.4180 as traders grow doubtful over whether the BoE will hiker rates twice this year. Whilst it is true that data this week has not been hugely supportive of a hike, the fact that the consumer is in a stronger position and that the Brexit landscape is relatively smooth right now could still encourage a more hawkish BoE in May.

Debenhams sinks 7% as profits sink 85%

The sun may be shining today, but the high street is still feeling the effect of the harsh winter. Retailers are once again under the spotlight as disappointing results from Debenhams highlight the continued struggle that retailers on the UK high street are facing. Profits at Debenhams dropped a massive 85% as the Beast from the East kept shoppers away. Debenhams warned on its full year outlook for the second time in four months and cut its dividend after reporting as the results from its turnaround programme are being hampered by a hard-pressed consumer who has reined in spending on non-essential items as inflation erodes households spending power.

Following another disastrous performance, Debenhams share price dropped over 7% to 21.48p as it continues to hover around its all time lowest price.