The FTSE dropped more than half a percent in early trading this morning to lurk just above the 7500 mark.
Spreadex Analyst, Connor Campbell suggested – “A 1% drop from copper – the metal is now at its worst price in a week and a half – weighed on the index’s mining stocks, while the ongoing British Airway’s chaos is hurting its parent IAG, which fell 3.5% as the session got underway.”
Sterling, meanwhile, is enduring a mixed morning, having stalled the losses that plagued it at the end of last week, with the currency holding above 1.28 against the dollar and pushing 0.2% higher against the euro. “However it is struggling to substantially move away from its recent lows due to its continued election-fretting, with the latest Survation Poll putting the Tories just 6 points ahead of Labour.” added Connor Campbell.
Over in the Eurozone things were similarly negative. The DAX and CAC fell 0.4% and 0.7% respectively, while the euro’s losses against the pound were joined by a 0.3% decline against the dollar.
“Talk that Italy will spice up Europe’s political landscape again with its own snap election is unsettling the idea that Europe is now free of populist risk in 2017. Former Italian Prime Minister Renzi has suggested Italy could hold simultaneous elections with Germany in September. Not to be left out, Greece may opt out of its next bailout if debt relief deal isn’t struck, adding to the potential for market disruption.” suggested LCG Analyst Jasper Lawler
“European assets need the three pillars of stronger economic data, higher political risk in the US and reduced political risk in Europe to outperform. Italy and Greece could are holding the sledgehammer that could knock down one of those three pillars. The confluence of risk associated with Italian elections, the Greek bailout and ECB President emphasising global risks are sending the euro lower on Tuesday.” added Lawler.
The short week ahead is likely to be a busy one for investors with plenty of data scheduled for release.
Accendo Markets Analyst, Henry Croft commented – “In focus today will be US Personal Income and Spending figures, kicking off a busy, shortened week for US macroeconomic data – concluding with the latest Jobs Report on Friday – which may influence the Fed ahead of their June meeting in a fortnight’s time. Income is expected to recover from March’s lowest level since November while Spending surges to its highest level in 2017, having stagnated over the past two months.”
“Elsewhere, Eurozone Confidence indicators are expected mixed” added Croft, “with Economic, Business and Industrial indicators all improving, while Services and headline Consumer Confidence remain unchanged. This afternoon, German CPI is expected to slow once again following April’s slight recovery, while US Consumer Confidence gives up some ground and the US Dallas Fed Manufacturing Index continues to fall from February’s 6-year high reading.”