Equities have posted small gains so far this morning, with the FTSE 100 up 20 points, lifted by hopes of a Fed rate cut and continued inflows into housebuilder stocks.

European equities are enjoying small gains, as stock markets attempt to build on the rally seen in the wake of Powell's testimony yesterday. The Fed chief has cleared the way for a cut at the next meeting, although it still seems likely that it will be just a 25 bps ‘insurance' cut instead of a 50 bps dose of ‘shock and awe'. However, a stronger pound and euro, the flipside of the weaker dollar, have meant that indices on this side of the Atlantic have failed to match the bullishness displayed by the US, and the memory of profit warnings from earlier in the week is also serving to limit risk appetite. Rising Iran tensions have helped boost the price of crude oil, with a break above $60 likely to lead to more gains as investors keep a close eye on the geopolitical situation and rising US demand.

UK homebuilders continue to find favour after Barratt's update yesterday. The sector has received a boost after a period of weakness in construction, although those investors moving in now will have to be mindful of the potential disruptions arising from a no-deal Brexit. No deal has gone from being unthinkable to a definite possibility, and with the likes of Amber Rudd now conceding that it must remain an option, it looks like attitude in some parts of the Conservative Party is coming round to this view.

Ahead of the open, we expect the Dow to start at 26,913, 53 points higher from Wednesday's close.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD extends gains to fresh seven-week highs

The American dollar is under selling pressure amid a better market mood. EUR/USD above 1.1140 ahead of several Fed’s speakers that can rock markets.


GBP/USD trades around 1.29 amid speculation of Brexit vote

GBP/USD is trading around 1.29 as speculation mounts about the fate of the Brexit deal. UK PM Johnson faces a test in parliament after securing an accord with the EU.


USD/JPY: struggles near mid-108.00s pivotal point amid weaker USD

US Dollar Index slumped to multi-month lows below 97.50. 10-year US Treasury bond yield adds more than 1% on Friday. Wall Street's main indexes look to start the day little changed.


China’s downward economic path offers no escape from its trade problems

There were no surprises in China’s GDP figures as the government portrays an economy slipping steadily lower giving little promise of improvement or support for the waning global expansion.

Read more

Gold turns flat above $1,490 as USD remains under pressure

After dropping to a daily low of $1,485, the XAU/USD pair staged a modest rebound during the American trading hours and turned flat on the day near $1,492.

Gold News

Forex Majors