The FTSE 100 opened positively this morning, rising 0.4% in early trading, taking it to within touching distance of the 7400 level, fueled it seems by a strengthening Dollar against the Euro in the aftermath of a violent Catalan independence referendum.
Spreadex analyst, Connor Campbell commented “Whether it can maintain that growth will largely be dependent on how the pound reacts to the latest UK manufacturing PMI, with analysts expecting the figure to slip from 56.9 to 56.3 month-on-month”
With the Non-Farm Payrolls scheduled for the end of the week, the dollar’s advance, however, might be short-lived ADS Securities analyst, Konstantinos Anthis commented “the aftermath of Hurricane Harvey is bound to be reflected on this week’s report and with analysts mentioning that the number of jobs added could come in as low as 75k, dollar bulls might opt for some caution. If the NFPs print weak as expected on Friday then this would be the third month in a row of weaker job growth and such a development could lower expectations for another hike in December taking the dollar lower.”
The pound will be in focus too this week as the PMI figures from all 3 sectors of the domestic economy are set for release. Today is the release of Manufacturing figures which are likely to set the tone and analysts are expecting a softer reading which could dampen expectations in October for a stronger pound.
Konstantinos Anthis added “The British currency saw a strong performance during September following renewed bullishness from the Bank of England that suggested that a higher interest rate policy might be needed to arrest the rallying inflation.”
“Depending on how strong the PMI figures print this week Sterling could have a positive start for the new month but if weakness is seen in most business sectors then the UK currency will most likely retreat below the 1.3350 support.”
Over in the Eurozone, “it appears that the weekend’s events in Spain – where the government produced an alarming display of force as it tried to prevent the Catalonia independence referendum – have softened up the euro in the early hours of trading.” suggested Connor Campbell. “The Eurozone indices, on the other hand, are riding high on the back of the currency’s fall, with the DAX jumping more than half a percent to hit a 12900-eyeing 15 week peak.”
On Friday, “the US equity markets closed higher across the board to close out the third quarter, with Tech sector outperformance helping the Nasdaq to better its peers and notch its 50th record closing high of the year” commented Accendo Markets analyst, Henry Croft.
“The S&P 500 also closed at a record high, while the 30-stock Dow Jones index finished within 0.1% of its best ever close.”
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