Corporate news gives plenty to digest
In setting a 36th consecutive quarter of like-for-like growth, Sainsbury's should have seen its shares rewarded; however a somewhat less-than-impressive final figure, coupled with a downgrade of its forward projection, has seen the share drift lower throughout the day.
Mothercare news has been even worse. Considering that the birth rate for the UK in 2013 was at its highest since 1972, missing its targets by so much is more than a little careless. The firm’s inability to compete successfully in the competitive online market goes some way to explaining why the shares have spent most of the day off by 30%.
It appears the markets had already factored in the impressive figures that Persimmon have reported; that being said they have set the bar high for the plethora of house builders reporting next week.
Markets await FOMC minutes and non-farms
At 7pm tonight (UK time) the markets will have their first opportunity to look over the minutes of the FOMC’s last meeting. History dictates that the Federal Reserve will have left these comments open enough for interpretation from both bulls and bears to have resonance. The markets have struggled to regain the pace that was set in the final weeks of 2013 and it feels very much like a clearance of this week’s final hurdle – the non-farm payrolls report – will be needed before traders can continue with any real confidence.
Gold’s recent dalliance above $1240 looks to be over just as quickly as it started. The precious metal's inability to close above the 50 day moving average appears to have raised too many questions in traders’ minds.
Even with yesterday’s correction, the price of Arabica coffee has sky rocketed this year jumping $6 in the first five days alone. Reports stating that Brazilian crops will fail to meet demand have driven the price higher.
BoE survey boosts pound
USD/CAD has broken above 1.08 and is now hitting levels last seen back in 2010. A combination of weakening Canadian manufacturing figures coupled with the continuing reduction to the US trade deficit are the main driving forces behind this move.
The Bank of England’s latest Credit Conditions Survey has helped to boost the pound and the GBP/USD has taken the opportunity to squeeze higher, bubbling away around the 1.6430 region.