The FTSE is down 7 points in early trading this morning, no doubt held back by continued Dollar weakness following the disappointing Non-Farm Payrolls data on Friday and investor caution as we await Retail post Christmas updates from the likes of Morrisons, Sainsbury’s, Tesco and Marks & Spencer this week.

The Retail sector will be in focus this week as a number of the big guns deliver their post Christmas verdict on arguably the most important period of the year. Investor sentiment will not have been helped by this morning’s profits warning by Mothercare which has led the stock to a further 25% fall on the back of a 44% drop over the last 12 months.

Spreadex analyst, Connor Campbell commented “. It really does seem as if 2018 is going to be a race to the bottom between Debenhams, Mothercare and any other bricks and mortar retailer that hasn’t already successfully pivoted online.”

The Dollar has started the new year on the back foot with very little in the economic calendar to drive it forwards this month. ADS Prime analyst, Konstantinos Anthis commented “Last week’s data was mixed with December’s Non-Farm Payrolls printing lower than expected, unemployment held steady and wage growth came in at 0.3% but the real question is what to expect from the Fed during the new year.”

“This lack of clarity that is the main reason traders are staying on the side-lines. As it will take some time to get a feeling for how bullish the Fed will be in 2018 we should expect more weakness for the dollar in the weeks to come. Jerome Powell will take the helm next month and until we officially receive his guidance the market can only guess at what his approach will be.”

FxPro analyst, Edward Anderson noted “USD remains under pressure even with comments by several Fed officials over the weekend suggesting the Federal Reserve remained on track to raise interest rates further in 2018 with 3 or even 4 rate hikes.”

The US equity markets rose on Friday, “capping off the best start to a year since 2006 for the Dow Jones and Nasdaq despite a weaker than expected Non-Farm Payrolls print.” suggested Accendo Markets analyst, Mike van Dulken. “The former climbed over 200 points, outperforming peers, as Boeing shares surged after reports of a potential tie-up with Brazil’s Embraer, while the latter climbed 0.8% as both Apple and Alphabet closed at record levels. The S&P 500 also climbed to a fresh record high thanks to that Tech sector strength.”

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Investments
8th January 2018
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