Will Mario keep Draghing out QE?

Will Mario keep Draghing out QE?

Mike van Dulken, Head of Research at Accendo Markets commented to clients at midday:

The FTSE100 index is in positive territory, having found support in rising lows dating back to late March. Earnings remain the principal driver, in reaction to some big name beats (BARC, VW, Total) and misses (Lufthansa, Deutsche Bank, Shell), in London and on the continent. The magic 3% level for US treasury yields remains a focus in terms of borrowing costs. Especially as we prepare for the possibility of ECB president Draghi tempering his outlook for policy normalisation, in light recent Eurozone data suggesting the region’s economic recovery slowing, perhaps still requiring stimulus (QE for longer?).

Contributors: FTSE +10pts, with the biggest positive contributions (>2pts each) coming from BATS (extending 5-day rebound, results yesterday), BP (oil prices off lows, read-across from Shell and Total Q1 results), GSK (rebound after yesterday’s results), DGE (bounce), IMB (BATS read-across) and ULVR (extending 4-day bounce). The main drag is from ex-dividends (GLEN, LGEN, RELX, ANTO and FRES) along with Shell (Q1 results disappointment), RIO/AAL (copper off highs) and HSBC (BARC Q1 read-across, jitters ahead of results next week).

Technicals: The FTSE 100 holds remains below 7400, but off its lows of 7355. Rising support remains valid, which could help the index rebound for a test of the current channel ceiling.”

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Categories: Analysis, News
Tags: FTSE

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