Investors in a sunny mood

Chris Beauchamp IG

he FTSE 100 has that Friday feeling, rising 60 points as the week draws to a close in London.

Equities put the icing on the cake after strong week
FTSE eyeing up key level
Euro skittish around $1.25 ahead of PMIs next week

The week is ending on a firmly positive note, with equities in positive territory and the usual bout of dollar selling helping to keep rallies in EURUSD, GBPUSD and others intact. Monday’s US holiday will see markets bereft of real volume, and while today’s gentle gains do not signal a mad rush into risk, the S&P 500’s push above the key 2730 level will be seen as an encouraging sign for the rest of the month. For the FTSE 100, the crucial 7300 level has been reached once again. We need a break above here to end the sideways drift that has prevailed since 5 February, something that has so far eluded us. What has been interesting is that US markets have once again performed better than
European markets since the lows of last week; despite a well-known love for European equities among fund managers, the US continues to steal the crown, thanks in no small part to the stronger euro.

A sunny day in London and a long weekend in the US means that things have generally quieter, and thus thinner liquidity has resulted in some key levels being defended across a number of markets. The dollar index is still grimly holding the 88 level, matching the January lows, although with positioning so extended it was going to be tough for dollar bears to make much progress today. Meanwhile EURUSD is watching $1.25 closely, with today’s sojourn above this level not proving sustainable. Flash eurozone PMIs next week mean that there is a lot to play for in euro crosses, with US PMIs on the same day (Wednesday) likely to throw in an extra dose of volatility too.

Author

Chris Beauchamp

EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

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