Shell warning hits FTSE 100

Chris Beauchamp IG

Indices are in retreat again, with a drop in oil names pushing the FTSE 100 to a sixty point loss in early trading.

Shell warning pushes down FTSE 100
Fed speakers dominate the afternoon
Dow set for lower open

Indices are down once again in early trading, with the FTSE 100 particularly hard-hit thanks to a warning from Shell which has driven that heavily-weighted stock and its peer BP firmly into the red. In a world of falling oil demand and a bigger push towards renewables, these energy titans increasingly look like creatures from another era, something which should give investors pause for thought. While neither Shell nor BP will be going anywhere soon, their importance as dividend payers will likely diminish relative to other sectors, and yield-hungry investors need to be prepared for this eventuality.

Most of today will be spent waiting for speeches from key Fed members, including of course chairman Jerome Powell. On a relatively quiet day for data, Powell’s speech is expected to be the main event, particularly if he decides to use the opportunity to push for more fiscal stimulus in the US as the expiration of unemployment support looms on the horizon. Central banks have done their bit, but the longer-term recovery will need big thinking, and at present it looks like this is lacking in the US. At least the UK has made an effort, as the prime minister announces a £5 billion programme of infrastructure, but even this will have to be followed by more if the economy is to get the support it needs.

Ahead of the open, we expect the Dow to start at 25,444, down 151 points on Monday’s close.

Author

Chris Beauchamp

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.