The FTSE was up 0.5% in early trading this following North Korea’s decision to avoid further provocation during its Founding Day celebrations and a downgrade in Hurricane Irma’s strength as it hit the US mainland.
Accendo Markets analyst, Mike van Dulken noted “This helpful combo has seen a return of risk appetite and corresponding fall in demand for safe havens. Equities and base metals thus called higher at the expense of Gold, Silver, bonds, the Japanese Yen and Swiss Franc.”
In FTSE corporate news, AstraZeneca reported positive results of a pair of phase 3 lung cancer trials which boosted its share price by 2.5% in early trading. Vodafone Germany is set to Invest €2bn in broadband services by 2021 while Associated British Foods improved full year outlook, helped by GBP devaluation, failed to excite investors, with the share price dropping 2.5%.
The focus will shift to the Pound this week with three events expected to shape the currency’s outlook. The Bank of England’s Rate Decision meeting on Thursday will be the main course with the UK inflation reading on Tuesday and the employment data release on Wednesday adding further significance.
ADS Securities analyst, Konstantinos Anthis noted “It will be very interesting to see how the pound will trade before and after the Rate Decision meeting later in the week, as it has been rather resilient throughout the summer season.”
“This week’s reports will help determine the medium-term outlook of the currency and analysts are expecting a strong showing for August’s data which could help the pound build some momentum to the upside”
Over in the US, equity markets closed lower on Friday ahead of the US landfall of Hurricane Irma. “Insurance, Energy and Tech names weighed” added Mike van Dulken. “The latter saw the Nasdaq underperform peers, down 0.6%, while the S&P 500 also fell as Energy names suffered in the face of a forecast Irma-induced demand reduction. The Dow Jones outperformed, closing 0.1% higher as The Traveler’s and Boeing led risers.”
