Another ECB non event?

The FTSE remains on the back foot, albeit off its 7650 lows. It is once again a victim of GBP strength after USD sold off, in spite of a hawkish Fed update.

Another ECB non event?

The FTSE remains on the back foot, albeit off its 7650 lows. It is once again a victim of GBP strength after USD sold off, in spite of a hawkish Fed update. Stronger than expected May UK retail sales also served to bolster UK inflation expectations and the likelihood of BoE rate hike. While USD weakness is helping oil prices to Energy names, disappointing overnight China data is weighing on metals and Miners ahead of the latest policy update from the European Central Bank. This could include timing for the end of its QE bond buying stimulus programme, but Draghi may just say it was “discussed”.

Contributors: FTSE100 -35pts, dragged lower by ULVR (warning about Brazil, to lose FTSE listing), Miners (China data), DGE/BATS (GBP strength), RELX (breakdown, UBS downgrade), HSBA (heavyweight), and PSN (ex-dividend). Insufficient buoyancy from the likes of GSK (drug success, generic competitor rejected), RR (restructuring, job cuts, reiterates cash flow guidance), BP (heavyweight, higher oil price), BT (breakout from range), VOD (US telecoms M&A) and BARC/LLOY (bounce off lows).

Technicals: The FTSE100 has bounced off 7650, extending a trend of shallow rising lows since late May.

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Categories: Analysis, News
Tags: FTSE 100

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