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FTSE remains in positive territory
The FTSE has remained confidently in positive territory all day, flirting with a push towards 6900. Risk assets are in favour, with miners boosted by a more optimistic outlook on the Australian economy, but the impact of holidays in parts of Europe should still be taken into account.
M&A is still the key driver of the FTSE, with Smith & Nephew under the microscope today as Stryker keeps the world guessing over whether it will launch an attempt on the company. The danger of missing expectations was clearly demonstrated by Kingfisher, which slumped 4.5% after customers failed to spend the better weather engaging in sustained bouts of DIY.
US GDP revision disappoints
Progress for US indices has been heavy going today, although the abysmal revision for Q1 GDP was a relative non-event. This is primarily down to the reading being for the first three months of the year, which is already a distant memory, while a better set of jobless claims did its part too. Drilling down into the GDP reading showed decent consumer spending, and most people have now moved on to wondering whether Q2 can show a nice bounceback. The S&P 500 has spent most of the session hovering around 1914, but there is nothing to suggest the current bout of quiet trading is anything more than a brief consolidation phase.
Gold and silver continue to struggle
The continuing low-volume rally in equity markets has been a difficult time for gold and silver, both of which are in their third successive daily decline. For gold the shakeout from the trading range has been brutal, resulting in losses that have seen the metal touch its lowest levels since the beginning of February. Safe-haven assets have been discarded, and even the first quarter GDP reading for the US was insufficient to lift gold from its doldrums.
Oil prices have been boosted by the news of further troubles in Ukraine. The new government may have successfully pushed the rebels back but the never-ending stream of headlines will serve as a useful prop to those looking to push the price higher.
Aussie continues surge higher
The Aussie continues to rampage through FX markets seemingly unchallenged. The headline number was a mere distraction, as underlying data shows a promising shift away from the mining sector. The terrible US GDP reading caused some strength to appear in the US dollar, but given a contraction had been widely expected (albeit not of that magnitude), the overall impact was limited. AS usual, the forward looking market has moved on and the impact of a quarter beset with terrible weather is diminishing in importance with each passing day.