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FTSE back above 6600
Even with a mid-week wobble, London’s leading index is up for the week and back above 6600, a fact that will please the optimists. Economic data has not set the world on fire today, but pre-Easter tidying up among investors has seen a boost in popularity for some of the more badly-hit companies.
The equity recovery has seen a number of asset managers rise today, with Schroders, St James's Place and Aberdeen Asset Management among the top movers. Hargreaves Lansdown continues to lag however, with the shares hovering just above £12 after some fairly hefty selling in recent weeks. However, we are still a way from touching recent highs, with 6680 being the level to watch. If the market can clear this we might safely say the rally is back in play, but for now the jury is still out.
US markets moving higher
US markets opened a shade lower, but have spent the first part of the session quietly moving higher. Goldman Sachs and Morgan Stanley both reported earnings that were ahead of expectations, but the doleful theme of poor trading income has been repeated in these names, echoing statements from earlier bank earnings this month.
The more cautious mood has been reflected in the Weibo IPO, which is set to begin trading today. At $17 per share, the price is at the low end of the range, reflecting the fact that the company may look like Twitter but under the surface the differences are substantial. Recent IPOs have seen weaker demand, an indication that some of the speculative froth has left the market. Whether this leads to a stronger move remains to be seen, but the positive earnings season so far is one cause for optimism.
Gold may see further losses
As the US and Europe wind down after a shortened week, commodity prices have calmed. The crisis in the Ukraine served to give a lift to prices in this arena, as gold, oil, wheat and corn all rose on fears that a standoff between Russia and the west would affect supply. Even though this crisis is not over, the daily news reports from Ukraine have become less worrying. This, together with Janet Yellen’s speech yesterday in which she appeared to row back further from her ‘six month’ comment, has meant that gold is no longer quite the beneficiary of upward pressure that it was some weeks ago. We are seeing gold oscillate around $1300 for yet another day, but a failure to hold here suggests that more losses may be in store.
GBP/USD holds above $1.68
Calm has descended in forex too ahead of the Easter weekend. Sterling bulls will be pleased that GBP/USD continues to hold above $1.68 for the second successive day, leaving the uptrend here intact.
Meanwhile EUR/USD is using $1.38 as a floor from which to build towards new gains. As we head into a second successive shortened week, the eurozone purchasing managers index data on Wednesday will be the focus.