The FTSE is just about trading in positive territory and unlike other European gauges it managed to hold its ground despite a weak close on Wall Street and heightened trade tensions between the US and China. The London index is being propped up by natural resources companies, utilities and oil producers helped by a further rise in oil prices.
Dousing hopes that the latest frosting up in US-China trade relations will be resolved swiftly, Google suspended part of its business with Huawei after President Trump put the firm on a trade blacklist. Huawei has almost become a barometer of the state of the trade dispute because it touches on many of the sore points that the two sides were not able to agree on during the talks including China’s perceived disregard for privacy and forced transfer of technology.
Pound firms post Brexit talks breakdown
The pound firmed 31 pips against the dollar and 23 against the euro signalling that the market is not overly concerned by the breakdown in the Brexit talks between the Prime Minister and the Labour party, possibly hoping for a better outcome than the potential Brexit options that were put on the table by the two sides.
Ryanair’s warning hits airlines
EasyJet, British Airways’ parent International Consolidated Airlines and TUI AG shares took a hit after Ryanair’s results reminded investors of the difficulties facing the travel sector, including high oil prices eroding the airlines’ margins. Brexit is also working its destructive magic on European airlines, already competing hard against one another in an overcrowded market. The Irish budget airline reported its weakest annual profit in four years and chief executive Michael O'Leary warned that results could become even worse later this year as the European aviation markets suffer from "attritional fare wars."
In the US it will be a bumper week for IPOs with three biotech companies due to come onto the market on Wednesday. All three cancer-focused companies Peloton Therapeutics, Ideaya Biosciences and Bicycle Therapeutics deal with different stages of cancer treatment and prevention.
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EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
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Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.