It was a mixed showing for Wall Street yesterday and minor losses for Asia overnight as looming central bank meetings and geopolitics keep investors on their toes. The FTSE outperformed thanks to Oil prices regaining some poise, while overnight macro data generated currency movement after resilient data from China and a Sterling pullback.
Accendo Markets Analyst, Mike Van Dulken commented – “China data suggests a strong start to 2017 with acceleration in industrial production and investment growth countering slightly slower retail sales. This and continued supply disruption (Philippines, Chile, Indonesia) is buoying base metals which could give legs to yesterday’s Mining sector bounce.”
A relatively empty economic calendar kept the UK market’s eyes firmly on macro concerns this Tuesday morning. The main action was centred on the pound, which gave back yesterday’s gains and then some after the bell. Plunging 0.9%, sterling is now back at a fresh 8 week low against the dollar; against the euro it has fared somewhat better, though a 0.8% fall is keeping it firmly below £0.90. This couldn’t much help the FTSE, however, which rose just 4 points as the day got underway.
Spreadex Analyst, Connor Campbell commented – “It appears that there are a few things in play here. The pound could be belatedly reacting to Nicola Sturgeon’s announcement of a second Scottish independence referendum, something that it basically ignored on Monday. Then there is the news that Article 50 will be triggered at the end of March – hardly an unforeseen problem, but one that carries a sting in its tail nonetheless. “
In focus today
With the UK Government ruling out triggering Article 50 for another two weeks, the focus today turns to Europe with the release of the German ZEW Survey. The release of the economic sentiment survey from Germany generally reflects the degree of optimism over Europe’s outlook.
ADS Securities Analyst, Konstantinos Anthis suggested – “today the figures are expected to print in a positive manner. This could allow the Euro to push higher again after the slight pullback over the US session yesterday.”