Established in 1974
185,800 clients worldwide
Over 15,000 markets

FTSE's running out of steam

In mid-morning trading the FTSE 100 is in the red again, knocked by weak risk appetite and ex-dividend stocks.

A glance at the FTSE 100 chart shows an index that seems to be running out of steam in its drive higher, and this is causing sentiment to become increasingly fragile. However, although May has seen little in terms of concrete gains there is no sign of a selloff materialising just yet, with buyers coming in around the 6770 level.

Macro data continues to improve, underlined by the surge in UK retail sales this morning that put a rocket under sterling and sent it back towards $1.69 against the US dollar. The move in GBP/USD was given added strength by the Bank of England minutes, which shows the balance of opinion on the Monetary Policy Committee is shifting in favour of the hawks for the first time in years. 

US futures are pushing nervously higher today, but the prospect of the Federal Reserve minutes suggests the day will see little action before the news hits wires this evening. The minutes will probably leave us none the wiser regarding the timetable for rate hikes, but the market cannot survive on warm words forever. At some point the Fed will have to alter guidance to a firmer timetable – that point hasn’t arrived yet, but it is not too far away. 

Ahead of the open, we expect the Dow Jones to start 15 points higher at 16,389.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.