The FTSE 100 opened a touch lower as focus shifted from this week’s historic summit between Donald Trump and the North Korean president onto key central bank interest rate meetings which are due to yield rate decisions and potentially a winding down of the easy money supply in Europe.
Central banks take centre stage
The Federal Reserve will finish its two day session today, most likely resulting in an interest rate increase. The bank is expected to opt for a 25 basis point interest rate increase, and if it does, it will be the seventh consecutive increase in this cycle.
Close on the heels of the Fed the European Central Bank is due to meet on Thursday. The markets are hoping for some clarity from European central bankers on their plans to wind down the ECB’s quantitive easing programme which has been in place since the financial crisis.
UK inflation data
Consumer Price Index, Producer Price Index and Retail Sales data due out at 9.30 this morning will show if UK consumer spending has stabilised after declining for several months this spring and if the cold weather and the late onset of Easter were the real reasons behind the decline or if there is a deeper underlying weakness in the economy. The pound is a touch weaker against most currencies in anticipation of slightly higher May numbers, down 0.09% against the dollar and down 0.13% against the euro.
Oil prices fall ahead of OPEC meeting
Oil prices continued to decline ahead of the OPEC meeting in Vienna next week with the market pricing in expected output increases from Russia and Saudi Arabia. The oil cartel warned Tuesday that there is downside risk to demand and that the outlook for the oil market in the second-half of this year was highly uncertain. In the meantime both Russia and Saudi Arabia have already started the process of increasing output and the US is also gradually increasing its rig count. Brent crude traded down 0.46% and WTI was down 0.26%
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
Recommended Content
Editors’ Picks
EUR/USD consolidates recovery below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery but remains below 1.0700 in early Europe on Thursday. The US Dollar holds its corrective decline amid a stabilizing market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD advances toward 1.2500 on weaker US Dollar
GBP/USD is extending recovery gains toward 1.2500 in the European morning on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold appears a ‘buy-the-dips’ trade on simmering Israel-Iran tensions
Gold price attempts another run to reclaim $2,400 amid looming geopolitical risks. US Dollar pulls back with Treasury yields despite hawkish Fedspeak, as risk appetite returns.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price is defending support at $1.80 as multiple technical indicators flash bearish. 21.67 million MANTA tokens worth $44 million are due to flood markets in a cliff unlock on Thursday.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.