Markets get little from May speech

Chris Beauchamp IG

Heading into the close the FTSE 100 is 40 points higher, as the pound weakens and the index rises following Theresa May’s speech.

OPEC & May fail to rock the boat
Investors can go back to worrying about the negotiations
Dollar looks to gain following FOMC

It has been a day of high expectations, and yet little in the way of really market-moving news. First OPEC, and then Theresa May in Florence. OPEC did not add much to the general picture surrounding the oil market, with a general air of ‘job going well so far, but more to do’. This however failed to satisfy oil traders, who had been hoping for indications of deeper cuts, rather than just an extension of existing measures. As a result, WTI is still stuck below $51, with all the signs pointing to another turn lower for the commodity. Meanwhile, having been billed as one of the big events of the month, Theresa May’s appearance in Florence also proved to be a let-down. The speech was big on
Johnson-style rhetoric, with plenty of ‘broad sunlit uplands’ stuff that spelled out how the UK wished to be a friend to the EU. But beyond that, little else. The pound took a bit of a knock, giving the FTSE 100 room to move higher, but beyond that the market has taken little notice. The focus returns to the negotiations, which should start again next week.

German elections on Sunday are expected to proceed as forecast, with Angela Merkel victorious once more. Markets should only give the event a passing nod, content that Europe’s strongest pillar will remain a beacon of stability. Otherwise, the focus in the coming week is on US durable goods; this week’s Fed meeting gave the dollar a boost, and it looks like a base may be forming that could see the greenback begin to regain some of the ground it has lost in recent months.

Author

Chris Beauchamp

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