FTSE experiences sluggish session
Today’s price action will have prompted the drinking of vast amounts of coffee, as traders attempt to stay awake watching a London market that has traded in a range of just over 30 points throughout the day. Yesterday the FTSE 100 showed a distinct aversion to 6700 and today it has decided that 6680 is too much as well, with ex-dividend stocks like Legal & General, Rolls-Royce and Centrica taking a bite out of the index. Fortunately, there has been more than enough corporate activity to offset the somnolent session for the indices.
ARM served up a nice appetiser to Apple’s figures this evening, posting a 10% rise in its pre-tax profits. However, the reaction among traders was a negative one, because of slower growth in the smartphone market. Apple’s results tonight will arguably be the bigger driver here, particularly if there are real signs that iPhone penetration in China is beginning to gain traction.
Dow rally loses footing
After six days of gains US markets have struggled to find their footing, registering small losses in the opening part of the session. Procter & Gamble and Norfolk Southern failed to live up to estimates, but these are mere preludes to the tech giants reporting this evening.
New home sales fell short in March, although the February figure was revised higher, while the US manufacturing purchasing managers index registered only the smallest of gains for April.
Copper edges into positive territory
A mid-afternoon surge has helped the copper price to edge into positive territory for the day, but overall the picture looks grimmer. Reports indicate that supply is going to become more plentiful as the Congo and Mongolia boost exports, while the morning’s HSBC flash China PMI remained in contraction territory, even if it was a modest improvement over the prior month figure. The $3 level remains the floor but there seems to be little capable of driving the price much higher in the short term.
EUR/USD finds support at $1.38
EUR/USD continues to confound many with its obstinate refusal to drop below $1.38. Better German PMI data was the basis of the price action, but this remains a currency pair that has no desire to give ground in any meaningful fashion unless, and until, the European Central Bank decides that enough is enough. As a result, we still await the next test of $1.39 which is likely to come sooner rather than later.