FTSE puts in a battling performance

Poor US data has added to an already nervous FTSE easing European equities lower in the afternoon session.

City of London skyline
Source: Bloomberg

European equities have taken their cue from their US counterparts this afternoon as a slew of disappointing US economic data has knocked any confidence out of traders. Having seen equity markets in both Europe and the US enjoy good runs higher over the last three weeks, we feel like we are now treading water waiting for events to materialise.

Tomorrow will see the latest US non-farm payrolls figures and, arguably more importantly, average hourly earnings being released. The debate over how many (if any) interest rate rises we will see from the Federal Reserve this year still feels unanswered and this data could go some way to clarifying market sentiment.

Although equities might have stalled, oil prices continue to rise as both WTI and Brent crude hit levels last seen in the first week of the year’s trading. How much further they can go is about as clear as the commodity itself, as prices are fast approaching moving averages and overbought levels on the relative strength index. There appears to be a battle of wills going on as technical analysts continue to advocate buying the dip while fundamental traders point to the massive oversupply and struggling demand.

The greater impetus in GBP/USD continues to be the sterling side of the equation as last week’s panic moves continue to dissipate. EUR/USD traders all too aware that the markets are fully factoring in the European Central Bank – specifically Mario Draghi – announcing further stimulus measures mid-way through next week.

All of this confusion and uncertainty has only added to the appeal of gold as it fast approaches its February highs. Although it no longer has the same quality reputation of a safe haven as in years gone by, it is perhaps enjoying its most successful run in some considerable time.    

FTSE 100 risers and fallers (as of 4pm) 

Company % change Index points
BP +2.83 +7.11
Glencore +6.17 +3.79
CRH +4.86 +2.86
Royal Dutch Shell A +1.12 +2.71
Rolls-Royce Holdings +5.51 +2.69

 

Company % change Index points
HSBC Holdings -3.85 -13.82
GlaxoSmithKline -1.90 -5.02
AstraZeneca -1.99 -3.98
Imperial Brands -2.66 -3.77
National Grid

-1.90

-2.66

The day ahead

Economic data:

1.30pm – Canada trade balance (January): the deficit is expected to widen to C$ 0.9 billion from C$ 0.59 billion.

1.30pm – US non-farm payrolls (February), average hourly earnings (February) and unemployment rate (February): non-farm payrolls: expected 222,000, prior 151,000. Average hourly earnings: MoM expected 0.07%, prior 0.5%. YoY expected 2.5%, pervious 2.5%. Unemployment is expected to remain at 4.9%.

Corporate reporting:

UK:  WPP

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