AstraZeneca still weighing on the FTSE
Markets are pushing off their lows in Europe and the US this afternoon, but the FTSE 100 has been unable to clamber out of negative territory while AstraZeneca is down 10%. At around 3% of the index Astra is too important to ignore, but most traders are looking beyond this one stock and are generally turning more bullish as the day goes on.
Ryanair’s figures continue to provide positive tailwinds for easyJet and International Consolidated Airlines, who are both topping the leaderboard in London. Investors are apparently betting that consumers have tired of the extreme no-frills approached that once worked so well for Ryanair, and that the gradual return of affluence will cause people to trade up in their air travel choices.
As the European elections draw near, our binary market continues to show that UKIP will likely emerge ahead of all other competitors. Increased scrutiny may put the party under pressure, but it is unlikely to cause many prospective voters to shift their ground. It seems the chance to deliver a resounding blow against ‘the establishment’ is just too good to pass up.
US traders remain cautious
US markets are somewhat mixed so far in this session, but like the UK and Europe futures were able to lift themselves from the early morning lows. Without much macro data to guide them traders have been understandably cautious, but as the session continues it seems like indices are showing increased resilience, boosting the probability that we will retest last week’s highs.
News of a new manager for Manchester United has been greeted with a slight drop in the share price in New York. The appointment is of course one of the toughest in football, but it had been widely anticipated. As with so many things in the stock market, the proof of the pudding will be in the eating, and so most shareholders have opted to leave their positions in the stock unchanged.
Gold circles around $1300
For yet another day gold has continued to circle around $1300, around the middle of its current trading range, indicating a closely-fought clash between gold bugs and their opponents. Again the absence of macro data is playing its part here, although a speech from Jens Weidmann lifted the yellow metal on hopes that some sort of easing policy would arrive at the next European Central Bank meeting.
Brent crude saw a sharp slump below $110 but US crude was lifted once again as traders fretted over reports of increased tension in Ukraine and Libya.
Cable marching higher
GBP/USD was on the march higher again, as positive momentum returned after one of the most difficult weeks for the currency so far this year. Despite continued discussion about a possible house-price bubble, the recent selling in the currency has subsided for now, putting the uptrend back into action and signalling that $1.70 is once again a real target.
EUR/USD is holding above $1.37 yet again, having found support around the 200-day moving average. PMIs later in the week will be key, and while the consensus has shifted in expectation of ECB easing, the bank will need to make sure the announced measures are sufficient to impress if they are to avoid the sight of EUR/USD going higher yet again.