One week to go in polls
We are now just a week away from the country going to the polls and the likelihood of a Labour minority government creeps ever higher, now up to 37% which of course raises a fair few questions. How comfortable would Labour be in getting into No. 10 on the back of the SNP, and equally important would be how much of a role would the Scots play? It is hard to believe that Ed Miliband would be too keen to spend much time sharing the stage with Nicola Sturgeon, especially when you consider how impressive she has been in the televised discussions.
With an indicated 49 seats out of the 59 available, the IG general election binary is a little bit more circumspect than the latest Ipsos MORI pool that was suggesting a clean sweep in Scotland. Most of the European equity markets will be off tomorrow for May Day and the fact the eurozone has seen out this short week with inflation managing to hold its ground will have sent traders off on a more optimistic mindset.
Unsurprisingly RBS has joined the list of banks having to report increased funds being allocated to historical misdemeanours ensuring that the UK taxpayer looks likely to remain the majority shareholder for far longer than they had ever imagined. As much as the major political parties would love to be able to extrapolate themselves from this burdensome bank, it looks no nearer to happening this year.
Considering what BP has been able to post previously it would have caused a seismic shock to the markets if Royal Dutch Shell had not been able to beat expectations too. Although profits were down 56% that is still some $800 million better than expected.
'Beat expectations' a regular occurence for this US reporting season
Now past the halfway mark in the US reporting season and with over 70% of S&P 500 companies who have reported managing to beat expectations, the now season debate of how high the bar is being set has begun. Unsurprisingly the naturally more cynical London offices are jumping to the conclusion that analysts are being a little too accommodative to the corporate arena.
Gold drops to $1280
The bounce in the dollar has sent gold tumbling back down to $1280 region as a combination of currency strength and improving US jobs data have successfully stopped the latest rally in the precious metal. The Saudi Arabian oil minister certainly talked a good game earlier in the year but with the US driving season coming, and the momentum building in the oil prices, we might need to see that increased supply he was referring to at the beginning of the year.
EUR/USD gets back losses
The drive higher that GBP/USD has been enjoying has come to a grinding halt today as further reflection on last night’s Federal Open Market Committee statement has seen the dollar bulls stop the slide. As much as the timeline in FOMC interest rate rising might have slid, it still find itself comfortably ahead of an increasingly lethargic looking chasing pack.
The European Central Bank’s QE inspired devaluation of the euro has for the time being been forgotten as EUR/USD continues to claw back losses incurred from late February onwards.