Europe
In Europe, the FTSE 100 is outperforming its German and French equivalents as basic resources stocks are in demand. Miners, and oil and gas companies are higher today and they assisted the London benchmark in standing out in comparison with other equity markets around Europe.
Later this week, Marks and Spencer (LON:MKS) will reveal their full-year figures. Traders clearly have high hopes as the stock is at a one year high. The sector as a whole is popular with traders, as Sainsbury's (LON:SBRY),Tesco (LON:TSCO) and WM Morrison Supermarkets PLC (LON:MRW) are all up on the day.
The FTSE 250 hit a record high today, the upward move it received even outperformed its big brother the FTSE 100. The telecoms sector is the best performer on the FTSE 250, with Inmarsat (LON:ISA) up 2.6%, TalkTalk (LON:TALK) up 1.6% and Intertek Group PLC (LON:ITRK) up 2.2%.
US
The Dow Jones and the S&P 500 are up 0.3% and 0.27% respectively. The volatility index (VIX) has slipped today, and while the fear is pouring out of the market, the bulls are entering. With little to go on in terms of economic announcements and corporate earnings, dealers used today as an excuse to go bargain-hunting.
FX
The EUR/USD and GBP/USD are both higher this session as the downward trend in the US dollar continues. All the hype around the pro-business policies that Donald Trump will implement helped push the greenback higher and higher after his election. Now, that there are major questions about how long he will be in office, dealers are dumping the dollar. Today has been a quiet day in terms of economic accouchements, but investors are still concerned about Mr Trump’s fight with the FBI.
Also, the fairly positive economic indicators that came out of the UK and the eurozone last week are still fresh in traders’ minds.
Later this week, the Fed will release their minutes from the April meeting, and this will give the market an insight into what they are thinking. It would be a risky move to increase interest rates while the political situation is unstable.
Commodities
Gold is creeping higher as the dip in the US dollar has made the precious metal more attractive. The upward trend that the market has been in since the 9th of May is still intact, and the market is making up for the losses it suffered during last week’s pullback. The Fed fund futures market is pricing in a 100% chance of an interest rate rise next month, but gold traders seem unfazed by this. The scandal that is surrounding Mr Trump is still in the back of traders’ minds, and should that story erupt again, we could see a jump in demand for gold.
Brent and WTI handed back their earlier gains after Iraq stated they are only looking to extend their oil production cut until the end of the year. Saudi Arabia has made it clear they want the production cut to last until the end of March 2018, but now that the second largest oil producer in the world only wants a six month extension some traders are cashing in their chips.
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