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UK to focus on this morning’s inflation figures

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US equity markets began the new week mixed, as outperformance from the Nasdaq led the Tech-heavy index to a fresh intraday high, while the Dow Jones and the S&P500 both edged lower.

Accendo Markets Analyst, Mike Van Dulken commented – “The Dow Jones couldn’t be helped into positive territory despite Apple also reaching a record high, with Home Depot and Goldman Sachs contributing most losses, while financials also weight on the S&P.”

It will be inflation that will be the key focus for investors today in the UK. The expectation is that the figure will come in significantly higher than January’s reading.

Spreadex Analyst, Connor Campbell suggested – “Analysts expect the figure to come in at 2.1%, a sharp rise on January’s 1.8% and the highest reading for over 3 years. That also, crucially, would take CPI above the Bank of England’s long-held 2.0% target. The surpassing of that aim could well push a couple more MPC members towards the Kristen Forbes end of things in the coming months; at the very least it will cause a few difficult conversations about how long to allow inflation to loiter above that target before tightening monetary policy.”

“If estimates are correct, this hawkish figure could help the Article 50-softened pound rise back above 1.24 against the dollar, a level sterling abandoned yesterday after Theresa May announced the date she will pull the Brexit trigger. For now, however, the pound still looks pretty meek, taking just 0.1% off the greenback while shedding 0.3% against the euro. The FTSE, on the other hand, refused to budge after the bell, the index likely not looking forward to confirmation of the UK’s ever rising prices.”

Over in Europe, a week lacking fresh economic data means attention is firmly fixed on political developments.

ADS Securities Analyst – Konstantinos Anthis commented – “Last night’s presidential debate in France appeared to have a clear winner in Emmanuel Macron, who came across the most convincing candidate in Elabe’s poll; the Euro seems to be benefiting from this development as it diminishes the likelihood of far-right candidate Marie Le Pen winning the Presidency.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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