The FTSE was the meekest of the morning’s indices, rising around 15 to 25 points to cross the 7300 mark. It leaves the index only 50 or so points away from a fresh all-time high – a small enough leap that a flurry of excitement could see the FTSE sweep to a new record peak without exerting much energy. As for the pound, it got off to a slow start, taking a mere 0.1% off both the dollar and the euro – not enough to significantly reverse the losses seen last Friday.
In the Eurozone things were far more robust, with the DAX and CAC surging 0.8% and 0.9% respectively. It’s hard to pinpoint exactly what is behind this up swell, though the prospect of progress in today’s Eurogroup meeting – to discuss, of course, the Greek debt crisis – could be fuelling the good vibes put out by investors this morning.
Beyond the major markets the main news this Monday was the collapse of Kraft Heinz’s attempted Unilever takeover. The deal, which was only revealed on Friday, fell apart almost immediately as Unilever firmly stated the ketchup maker’s £40 per share bid was insultingly low.
Spreadex Analyst Connor Cambell commented – “Kraft Heinz evidently didn’t feel up to the M&A battle this rejection suggested, announcing this morning that it was abandoning the proposed merger. Understandably Unilever’s investors weren’t best pleased, having sent the company nearly 14% higher last week, the stock dropping just shy of 9% after the bell.”
In focus today
One likely to prove quiet on account of President’s Day holiday in the US, is likely to be a combination of withdrawal of Kraft-Heinz Bid for Unilever and any sound bites from the first of a 2-day second reading of the UK Brexit Bill in the House of Lords (Upper house), where over 190 are set to participate, highlighting the bill’s significance.
The EU’s Tusk and US Vice-President Pence speak shortly, the later having offered diplomatic rhetoric at the weekend’s Munich Security Conference meeting, helping counter some of his Boss’s more aggressive chat since taking office.
Data-wise, releases are limited to UK CBI Trends Orders which are expected to remain positive – two consecutive months for the first time since 2015 – while Selling Prices will look to better last month’s 28 mark driven by a weaker GBP. Eurozone Consumer Confidence is expected to be marginally lower at -4.8 after January’s 2-year best reading of -4.7.
With no US news and data expected today, investors will be focusing their attention on the release of the US Manufacturing and Services PMI reports on Tuesday and undoubtedly on the Fed minutes’ release on Wednesday. The markets will be closely monitoring how strong US policymakers’ resolve is and whether a March rate hike can be expected.
ADS Prime Analyst, Jamieson Blake commented – “with expectations set for a bullish reading on both surveys, the sentiment towards the US economy remains highly positive.”