After beginning the week on the back foot, both the UK stock market and sterling have shrugged of the initial weakness to trade higher on the day.
Some Hawkish comments from Fed vice chair Stanley Fischer over the weekend saw the GBP/USD open lower mainly on some strengthening in the greenback. Expectations of a Fed rate hike as soon as next month have risen and any further hints alluding to this during Friday’s Jackson Hole symposium could spark a rally in the buck.
Housebuilders enjoy bright start
Stocks in building firms are amongst the best performing on the FTSE 100 so far this morning, with Taylor Wimpey (LON:TW), Barratt Developments (LON:BDEV) and Berkeley Group Holdings all featuring prominently at the top of the index and rising by more than a percent on the day. The benchmark as a whole, is broadly speaking flat, at the start of a fairly quiet week in terms of economic releases.
A drop seen in the price of precious metals, due in part to the US dollar’s rise, has weighed on Fresnillo (LON:FRES) and Randgold Resources (LON:RRS) with shares in these two at the foot of the index. Shares in the mining sector are fairly deep in negative territory in early trade with Anglo American (LON:AAL), Rio Tinto (LON:RIO) and Glencore (LON:GLEN) all trading in the red.
Oil pares recent gains
After Brent crude saw its front month contract post a highest weekly close of the year last week, there has been some softness seen so far today. Another weekly rise in US rig counts announced on Friday saw some small selling into the close, whilst comments out of Iraq over the weekend that their oil exports will increase by 5% within days as extraction from the Kirkuk fields restarts, have raised questions of the fundamental support for the recent rally.
As its denominated in US dollars, any moves in the currency this week leading up to the Jackson Hole symposium could impact crude prices and, as always, API and DOE inventory data could prove pivotal for the market especially with both Brent and WTI trading within striking distance of their year-to-date highs.