CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

FTSE 100 futures point to lower open on Wednesday, EUR/USD remains up

Following an uncertain session on Tuesday, futures markets suggest the FTSE 100 will open lower on Wednesday, 19 May 2021.

FTSE 100 Index Wrap

After starting yesterday's session off strongly following the release of better-than-expected jobs data, the FTSE 100 index just managed to eke out a gain on Tuesday, with the likes of Vodafone weighing heavily on the benchmark.

After hitting 7,094 points in the first half-hour of trade, the blue-chip benchmark drifted almost a full-percent lower from its intraday peak, closing Tuesday’s session at 7,034.24 points.

Positive employment data did little to slow that slump, with government data showing that the UK unemployment rate fell to 4.8% in the March quarter – despite much of the country being in lockdown during that period. That was ahead of the 4.9% unemployment rate that economists were forecasting heading into the data release.

Total individuals seeking employment also dropped, hitting 1.6 million, down from the 1.7 million seeking work outlined in the prior data release.

Elsewhere, while stocks such as Fresnillo, Sage and NatWest rose strongly during the session, the likes of DCC, Antofagasta and Vodafone Group proved to be a drag on the benchmark.

Vodafone was the largest disappointment, with the telco falling 8.91% during the session. The company’s preliminary results evidently did not excite nor impress investors, with Vodafone reporting lower revenue, earnings (EBITDA) and free cash flow.

FTSE Futures Point to Lower Open

Futures markets currently suggest that the blue-chip benchmark will open lower on Wednesday, 19 May, with FTSE 100 futures down 0.89% or 62 points, at the time of writing.

This comes as Asian stocks put in a mixed performance on Wednesday ahead of the European open, with Japanese, Chinese and Australian stocks – all trading lower or in a volatile fashion. India's Nifty 50 traded higher, if just slighlty, at the time of writing.

GBP/USD and EUR/USD in Focus

Key European currencies – such as the Euro (EUR/USD) and the Pound (GBP/USD) – rose overnight, with the Pound in particular buoyed by the solid UK jobs performance highlighted above. On both fronts, IG Market Analyst Kyle Rodda noted that:

‘The US Dollar Index pushed through the 90.00 level, primarily due to a resurgent EUR/USD, which ascended into the 1.22 handle overnight, as yields spreads compress between US and European bonds, on budding hopes for a sustained Eurozone economic recovery.’

Since March 30 the EUR/USD has risen approximately 4.35%.

Beyond that, Mr Rodda noted that the Pound was positively influenced by the UK jobs data beat, saying:

‘The GBP/USD also added to Dollar weakness, with the Cable briefly busting through the 1.42 level on better than forecast UK employment data.’

For traders and investors, IG’s recently launched CFD Trading Calculator can help you discover how a CFD trade works – including the margin requirement for your trade and the potential profit or loss.

Take the EUR/USD currency pair for example* and assume an opening price of 1.2100 and a trade size of $5.00 per point move. Under those parameters your margin requirement would be $2,014.65.

In this example, our CFD Trading Calculator shows that if the EUR/USD moved up 200 points to the 1.2300 level, potential profits would stand at $995.00. By comparison, if the EUR/USD moved down 200 points to the 1.1900 level, potential losses would stand at $1,005.00.

To learn more about our CFD Trading Calculator or test it out for yourself, discover it here.

*The profit, loss and margin requirement figures in this example are for illustrative purposes only, and the calculation assumes a spread of 1 point – which could vary. If you keep your positions on spot markets open overnight, you will pay overnight funding charges.

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. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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