Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE Closed On Record High; Spain In Focus As Catalan Separatists Win

Published 22/12/2017, 07:13
Updated 03/08/2021, 16:15

Yesterday the FTSE 100 closed above the 7600 mark for the first time, as commodity related stocks like Royal Dutch Shell (LON:RDSa), BP (LON:BP), and BHP Billiton (LON:BLT) formed the foundation of the rally. Consumer goods stocks like Tesco (LON:TSCO) and Reckitt Benckiser (LON:RB) climbed as shopper stock up before Christmas.

Spanish stocks will be in focus today as dealers react to the outcome of the Catalan regional elections where the separatist parties won an absolute majority in the regional parliament. This result will not be welcomed by the Madrid government who were hoping this snap election would reduce the calls for independence, and today’s result will keep the issues on the table.

US equities had a strong finish last night as some major American companies like Comcast (NASDAQ:CMCSA), AT&T (NYSE:T), Wells Fargo (NYSE:WFC) and Boeing (NYSE:BA) pledged to spend more on wages in light of the tax reform. The combination of a more pro-business corporate tax rate, tax cuts for worker, and the potential for wages increases too could be a big boost for the US economy. Average earnings growth has lagged behind job creation growth, and if more companies pledge higher earnings it could be a major shot in the arm to the US economy.

The House of Representatives voted in favour of a short-term funding bill which will see the US government being funded up until mid-January. It is expected to be passed in the Senate too, and it may pave the wave for President Trump to be able to sign-off on the tax reforms as soon as today.

At 9.30am (UK time) the UK will announce the third-quarter GDP figures, and economists are expecting the reading to remain unchanged at 1.5%. The British economy has been ticking along nicely, and broadly speaking the economic indicators have been positive.

Mark Carney, the governor of the Bank of England, stated the UK banking system is well financed enough to cope with Brexit, and stated a transitional phase post March 2019 would be beneficial to the British financial sector. The pound has had an impressive 2017, especially when you consider what sharp it was in at the start of the year.

EUR/USD – has been edging higher since mid-December and if it holds above the 100-day moving average at 1.1800 it could target 1.1961, and a move through that mark might bring 1.2000 into play. Support could be found at 1.1670.

GBP/USD – has been pushing higher since March and is above the trend line support which comes into play in the 1.3300 region. Rallies could encounter resistance at 1.3548 or 1.3659. A move below 1.3300 may send the market to 1.3200.

EUR/GBP – has been edging higher since early December, but has managed to move slip below the 50-day moving average at 0.8860. If it falls further from here it could find support at 0.8800. If it retakes 0.8860, it could target the 100-day moving average at 0.8938.

USD/JPY – has pushed above the 50-day moving average at 112.89, and if it holds above that metric it could target the 114.00 region, and a break thought that price might put 114.73 on the radar. Support might be found in the 112.00 area. A break below 112.00 could find support in the 111.00 region.

FTSE 100 is expected to open 17 points lower at 7586.

DAX is expected to open 22 points lower at 13087.

CAC 40 is expected to open 13 points lower at 5372.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.