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The FTSE is flat in early trading this morning, up just 3 points with the Pound strengthening against the Dollar in anticipation of a favourable inflation report this morning. That is despite a strong showing from the mining sector with Antofagasta, BHP Billiton, Rio Tinto, Glencore and Anglo American each posting a rise of 2% or more following positive inflation news from China.

Meanwhile, it’s ConvaTec that is doing its best to suppress any FTSE charge. The medical supplier has warned on full year profits following supply issues in both its advanced wound care and ostomy care businesses and a lower than anticipated revenue contribution from new products. The share price is down almost 20% in early trading as investors digest the news.

The Dollar has begun the week on the defensive against its major pairings following several days of losses against its peers. FxPro analyst, Edward Anderson commented “On Friday, US Consumer Price Index data was released and failed to impress the markets.”

“The markets disappointment resulted in a broad sell-off of USD following the release although USD has retraced over the weekend. Inflation data will continue to be the “guiding force” for future rate hikes.”

The Pound is in focus too this week with the UK inflation report eagerly awaited. Sterling has been propped up in the last few weeks by the prospect of increasing inflation and positive noises from Bank of England Governor, Mark Carney, of an interest rate increase in November.

ADS Securities analyst, Konstantinos Anthis noted “This month’s [inflation] report will be closely watched and if price growth continues pointing higher the odds of a rate hike from the BoE this year will soar dragging the pound higher with them.”

“At the same time, employment and consumer spending data are pending for release from the UK this week and expectations are set for a positive set of figures”

Over in the Eurozone, the Euro is facing a number of challenges today. Catalonia has missed its deadline to clarify its intention for independence while Theresa May is scheduled to hold Brexit talks with EU Chiefs to break the current stalemate.

Things are also becoming clearer in the Austrian election race too, with an outcome that may hold further repercussions for the single currency. Edward Anderson suggested “The Austrian election highlights another country focusing on Nationalistic policies. The conservative People’s Party, led by Sebastian Kurz, appear to be on track to win the election with 31.6% of the vote. The obvious concern is for another country to go against its Euro members stance on immigration and what that could mean for Austria and the greater Eurozone.”

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Michael Morton

Michael Morton

Michael has worked within the Financial Industry for more than 20 years. Starting out as a financial analyst, he has extensive experience working with fund management groups and brokerages.

With an interest in Stocks and Shares, Funds, ETFs and Commodities, his investment focus is medium to long term gains, with the objective of financial security on retirement, and building wealth for his young children for their adult life. His broker of choice is Hargreaves Lansdown.

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