The FTSE surged to a 6-month high, boosted by a falling pound post dire retail sales data and amid broad risk on sentiment following Chinese GDP data. NMC Health topped the index whilst miners also featured heavily on the gainers’ board.
Economic growth in China touched a 29-year low at 6.1% in 2019, down from 6.6% in 2018. The fact that GDP was in Line with expectations an offered no nasty surprises, despite the US – China trade dispute running across the year, has left investors relieved. The data comes just two days after the signing of the US – China trade deal which should help to put a floor under risks to the manufacturing sector. There are still signs of distress in other areas of the economy such as the banking sector as financial risks continue to accumulate.
Dismal retail sales sent the pound lower across the session. The pound snapped a three-day winning streak which had seen it rally to $1.3118. The data is part of a more sinister picture. GDP unexpectedly contracted in November, inflation hit a three-year low and UK retail sales recorded a spectacular miss, contracting -0.6% mom rather than a 0.6% gain. A hat-trick of soft data across this week makes an interest rate cut by the Bank of England at the end of the month all the more likely. The pound has weakened reflecting the increased probability of a rate cut. However, sterling remains comfortably above the key psychological level of $1.30.
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed