US equities closed mostly flat, although the Nasdaq outperformed (another record high) on well-placed expectations of solid results from Alphabet Amazon and Microsoft, even if Intel disappointed.
Accendo Markets Analyst, Mike van Dulken noted – “Investors were also relieved to hear Trump decided not to terminate NAFTA, some good news after his tax news underwhelmed, and that progress is being made with the Healthcare bill, which could unlock the door to funding the tax cuts and infrastructure spending markets are so desperate for.”
Investors are looking forward to some data to sink their teeth into today, kicking off with the first glimpse at the UK’s Q1 GDP figure.
Spreadex Analyst, Connor Campbell commented – “After surprising everyone with 0.7% growth in the final quarter of 2016, the UK is expected to have seen a sharp drop-off in Q1 2017, analysts estimating that the country’s economy expanded by just 0.4% across the first 3 months of the year. The GDP readings for the last few quarters, however, have tended to beat the Brexit-inspired gloom, so there is room for a shock this morning.”
That uncertainty explains why the FTSE and the pound have been reticence to do much after the bell. The UK index yawned its way through the open, caught between Barclays’ steep 4.5% decline and the 1.5% rise managed by RBS (despite both banks posting impressive results). Sterling was equally uninspired, continuing to flit around 1.29 against the dollar while giving back a slither of the growth it managed against the euro following Draghi’s dovish comments yesterday.
In Europe, the DAX fell by 0.1%, while the CAC rose by the same amount despite a disappointing French GDP figure, the reading missing estimates at 0.3%.
Connor Campbell commented – “The most important piece of Eurozone data is still to come: the latest inflation reading. With Mario Draghi stating yesterday that the region-wide CPI still isn’t up to scratch, investors will be keen to see if the core inflation figure – the one that really matters to the ECB chief – can continue to climb, with analysts forecasting a jump from 0.7% to 1.0% month-on-month.”
US GDP which will be announced this afternoon is forecast to have slowed markedly in Q1, back to similar levels posted in the same quarter of last year.
LCG Analyst, Ipek Ozkardeskaya suggested – “Weak economic data combined with the halfway completed tax reform announcement from the White House on Wednesday have resulted in a confused US dollar market over the week. A soft GDP read could weigh on the US dollar before the weekly closing bell.”