Wall St resumes uptrend

Wall St resumes uptrend

FTSE 100 Index called to open +10pts at 7550, continuing to inch towards record highs of 7600 and extend this week’s bounce from 7480 and yesterday’s break above 7540. Bulls need to get above overnight highs of 7555, and for 7540 to hold as support, while Bears will be looking for a break below the latter. Bullish 7555, Bearish 7540.

Calls for a positive open come after US indices resumed their uptrend to deliver more record highs ahead of earnings season and Asia picked the bullish baton overnight. Australia’s ASX outperforms thanks to utilities, tech and consumer discretionary, although we note weakness among metals prices. The oil price rebound is helping sentiment ahead of the monthly OPEC report.

Japan’s Nikkei continues to close in on its June 2015 record, although it has underperformed overnight on account of USD weakness resulting in Yen strength, something echoed by Gold, and sharp drops (Kobe steel, Sanrio). As stated over the last few days beware USD weakness representing a hindrance for the UK FTSE by way of reciprocal GBP strength.

FTSE headlines this morning: Hargreaves Lansdown Q1 benefited from significant transfer activity, sees improved market sentiment. Mondi expects strong final quarter, higher selling prices. Wood Group wins multi-million dollar contract with Total. Telford Homes says pre-tax profit for H1 2018 expected to be significantly lower than H2 2018 and lower than last year. Watch the housebuilders after yesterday’s gains.

Dunelm Q1 revenues +24.8%, like-for-like +9.3%. Polymetal reports significant increase in Ore Reserves at Komar gold deposit in Kazakhstan. Countryside Properties completions +28%, net reservation ratio rate up to 0.84, open sales outlets +9%, private forward order book +8% but average selling price -8% (underlying sales price growth +5%).

Oil prices are holding their rebound above $51 and $56 ahead of the monthly OPEC report and helped by persistent USD weakness. Gold is back below $1290 after US stocks resumed their uptrend, sapping safe haven demand.

In focus today – another quite one for macro data – will be September’s Fed FOMC Meeting minutes (7pm) which may give traders a clearer view on the tone of US monetary policy debate and update expectations for the trajectory of policy normalisation.

After Catalan President Puigdemont stopped short of declaring independence yesterday, what Spanish PM Rajoy has to say this afternoon will be interesting. After  Oil’s rebound, the latest OPEC monthly report will be closely watched.

In terms of data, US Mortgage Applications (12pm) and US JOLTS Openings (3pm) are all we have.

The Fed’s Evans (voter, dovish, 12.15pm) speaks about current economic conditions and monetary policy in Zurich, with audience and media Q&A. Colleague Williams (voter, neutral, 7.40pm) deliver a speech on community leaders in Salt Lake City, also with audience Q&A. ECB Chief Economist Praet (7.50pm) speaks at the SUERF European Money and Finance Forum in New York.

Note the FTSE index goes ex-div for 7pts at 4.30pm, adjusting for the fact that Centrica (3.6p/2.1%), HSBC (7.6p/1.0%) and Tesco (1p/0.5%) will trade without the rights to their latest dividend from 8am tomorrow.

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