Mining stocks help drive FTSE gains

Joshua Mahony MSTA Scope Markets

Rising commodity prices are helping to lift UK-listed miners today, with hawkish Yellen comments being largely disregarded.

European markets on the rise, with vaccination efforts signalling strong second half.
Yellen comments fail to stifle rebound.
Mining stocks lead the way, as commodities continue to surge.

European markets are leaving the pessimism of yesterday behind, with commodity-focused stocks helping to drive UK markets higher in early trade. Coming off the back of a sharp pullback in European markets, today’s recovery highlights the underlying level of confidence that is building as the vaccination programmes throughout Europe gather momentum. Despite having seen huge economic implications throughout the region, the focused vaccination efforts in Europe bring confidence of a swift rebound in the coming months. From a US perspective, the aim to vaccinate 70% of the population by 4 July brings great expectations that the second half of 2021 will bring a huge influx of spending and economic activity.

Questionable comments from Janet Yellen have failed to dent market sentiment today, with the Treasury Secretary stating that the Biden stimulus plans could result in inflation and potential monetary tightening. While Yellen belatedly rowed back on her somewhat hawkish comments, markets thankfully seemed somewhat willing to make peace with the fact that inflation remains a risk going forward.

Mining stocks are enjoying a welcome boost in early trade today, with surging prices across a host of commodities driving up valuations in the sector. Copper prices have been rising steadily of late, with prices touching $10,000 as inventories dwindle in the face of insufficient supply. However, that is a story told across the board, with the likes of Lumber experiencing almost exponential growth over the past year. With western nations planning a raft of infrastructure spending in the coming years, there seems little sign that this commodity boom is about to end.

Ahead of the open we expect the Dow Jones to open 97 points higher, at 34,230.

Author

Joshua Mahony MSTA

Scope Markets

Joshua Mahony is Chief Markets Analyst at Scope Markets. Joshua has a particular focus on macro-economics and technical analysis, built up over his 11 years of experience as a market analyst across three brokers.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.