FTSE 100 Futures Point to Lower Open on Wednesday, EUR/USD Remains Up

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.’

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.