The FTSE started the day on a weaker note digesting weaker oil prices, Asian data and the aftermath of the violent protests in Hong Kong this week. Banks, oil firms and retailers attracted the most volume but declines were only moderate.
Chinese industrial data played a part in the FTSE’s decline as the UK is the second largest European exporter into the country. Industrial production in China is now at a 17-year low, reflecting weaker domestic demand but also the escalating trade tensions which became worse during May, the month of the latest data reading.
There was some volatility in the oil market with Brent crude prices slipping in early trade after the International Energy Agency cut its forecasts for global demand this year. There has not been an escalation in the Strait of Hormuz following yesterday’s attacks on two tankers but the situation remains fragile and is creating a support level for oil prices.
Tory leadership vote puts Johnson in the lead
The pound is barely showing any signs of life, trading in a narrow channel against the dollar and the euro since late yesterday when Conservative MPs went into the first round of voting on their next party leader. Boris Johnson emerged far in the lead ahead of the second candidate, foreign secretary Jeremy Hunt, with more than twice as many votes.
For the pound, one of the key aspects of Johnson’s stance is his view of a no-deal Brexit and sterling’s inactivity this morning reflects his recent more conciliatory view saying that he was not aiming for a no-deal outcome. For the moment the fabled volatility in the currency market has not materialised but there is time yet for the temperature to start rising.
US retail sales to channel EUR/USD action
US industrial production data and retail sales due out later today will be the focal point for euro/dollar trading as this is the last set of significant economic data before next week’s FOMC meeting.
Recent economic pulse taking in the US showed weaker data, particularly in the job market and Friday’s numbers will be key to deciding on whether there is a case for a change in US interest rates, as the markets are expecting, or not.
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
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.