The FTSE 100 is trading slightly softer this morning, lower by 52 points and falling back below the 6800 level. The pound, on the other hand, is performing well and gaining against all its major peers after a slow start to the week.
Mining stocks lead the losers
The worst performing stocks on the leading UK index today come from the mining sector with Fresnillo (LON:FRES), BHP Billiton (LON:BLT) and Randgold Resources (LON:RRS) all sitting on notable losses. Elsewhere BP (LON:BP) and Royal Dutch Shell (LON:RDSa) are also in the red as we head into a 48 hour period that could prove pivotal for the price of oil in the near-term future. With OPEC members meeting tomorrow in an attempt to finalise the output levels for each individual nation within a broader group-wide production cut, the outcome remains in the balance.
An agreement that would see the organisation's output reduced to between 32.5 and 33 million barrels a day from a record in excess of 34 million on average for last month would be widely regarded as positive for price, however many doubt this will be achieved. There is still some work to be done before this can be achieved with Iran and Iraq both fighting for a deal that would not impact their own levels of production, and it is not simply a case of dotting the i’s and crossing the t’s to finalise an agreement.
A failure to successfully implement the measures to curb output that were agreed upon last month could send the market tumbling, with a move back below $40 for Brent entirely feasible if this transpires. The benchmark has exhibited heightened levels of volatility in recent weeks as the meeting approaches and it seems there is still some way to go to reach an amicable solution for all parties.
Mortgage approvals rise
The latest data from the Bank of England showed that 68k mortgage applications were approved in October, a reading that is the highest for this measure since June. This data point came in above the previous of 63k and also above consensus estimates amongst analysts for a print of 66k. The central bank also announced a 1.1% month on month increase in its money supply which could be seen as a positive development in leading to additional spending and investment, but can also be taken as inflationary. The pound is rising in part due to these releases, and trades not far below the 1.25 handle against the US dollar whilst also appreciating by approximately 1% against the Japanese yen.