FTSE performs into the weekend

Encouraging economic data and increased optimism sees equity markets push towards year-high levels.

Data
Source: Bloomberg

Traders started the day mildly optimistic about what lay ahead, but as the day has evolved they have become increasingly pleased with the way that things have progressed. The eurozone have made it three from three, as today’s retail purchase manager’s index figures (PMI) have beaten expectations, just as both the manufacturing and servicing PMI data earlier in the week had.

Corporate data has been thin on the ground, but what there has been has been well received. The London Stock Exchange, already with a list of admirers, have posted full-year figures reflecting a jump in profits of 30%.

WPP, the world’s largest advertising firm have also shown that income improved throughout 2015, and has already shown encouraging signs for the year ahead with improving January figures year on year.

With the spot market for soft commodities performing well, the FTSE 100 mining sector has led from the front up by over 4% on the day.

Gold really is behaving the way you would imagine a precious metal would, showing resilience after the brief collapse following the release of NFP figures, and by mid-afternoon trading above $1280.

What is even more impressive about gold’s recent performance, has been the fact that most of the surges in the price have happened during the US trading session, rather than the more favorable Asian trading sessions.

The first Friday of the month always offers the opportunity for confusion, as the quickly correlated non-farm figures have the ability to spook the markets.

Stronger than expected headline figures have helped deflect attention away from the falling average hourly earnings figures. Neither of these pieces of data are strong enough to shift the markets’ current expectations for US interest rate rises.

With non-farm payrolls now out of the way, markets will turn their attention to the next major hurdle of the month, namely European Central Bank (ECB) President Mario Draghi’s speech on Thursday.

Within 24-hours of last month’s meeting, institutions had begun to predict an increase to the current ECB quantitative easing process happening in March. Extra spending power and an increased basket of available bonds as part of the ECB’s arsenal have been almost fully factored in by traders. 

FTSE 100 risers and fallers (as of 04:30pm) 

Company % change Index points
Glencore +11.89 +7.79
British American Tobacco +2.19 +6.29
BHP Billiton +9.12 +5.97
Rio Tinto +5.86 +5.66
Barclays +4.81 +0.51

 

Company % change Index points
BT Group -1.10 -1.71
Imperial Brands -0.46 -0.63
Travis Perkins -3.57 -0.63
CRH -0.93 -0.57
Schroders

-4.16

--0.51

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