After oh so briefly crossing 7200 the FTSE has cooled this Tuesday, though the index remains on track for a record close later this afternoon.
It appears that this morning’s December manufacturing PMI reading, which came in at an 18 month peak of 56.1 against the 53.3 expected, hampered the FTSE’s record-breaking surge by giving a boost to the pound. In the aftermath of the PMI release sterling jumped 0.6% against the euro, taking it back above 1.18 for the first time in a week and a half; this was enough to temper the FTSE’s growth, despite the fact that the pound is continuing to struggle against the dollar.
Over in the Eurozone the CAC outperformed the DAX, the French index rising half a percent to its German peer’s rather flat performance. This sluggish showing from the DAX came despite a weak start to the New Year for the euro (which shed 0.6% against both the dollar and the pound) and a better than forecast drop in German unemployment.
Looking ahead to this afternoon and following a bitterly disappointing end to 2016 that saw the index fail to break 20000 the Dow Jones is set to recover some of its losses this Tuesday. The Dow futures are suggesting the index will reclaim around 150 points, pushing it above 19900 and putting that elusive landmark level back on the cards. In terms of data the US has a double dose of manufacturing PMIs after the bell; the Markit reading is expected to be confirmed at 54.2, while the ISM figure is forecast to jump from 53.2 to 53.7 month-on-month.
