Despite some better than forecast figures – admittedly, the bar was very low – the FTSE joined the rest of Europe in the red.
Doubling consensus estimates, the UK eked out a 1% rise in GDP during the fourth quarter, avoiding a double dip recession in the process. It’s hard to take much heart from that number, however. It is a dramatic drop off from Q3’s 16.0% rebound, still left the UK with a record contraction of 9.9% across 2020, and indicates an ugly figure for the present, lockdown-impacted Q1 2021.
With all that in mind, investors weren’t in a hurry to celebrate the beat. Instead, with manufacturing and industrial production falling short of forecasts, the UK commodity sector helped lead the FTSE 0.7% lower, knocking the index out of its February trading range comfort zone.
The pound wasn’t too impressed, either. Shedding 0.2%, GBP/USD found itself moving further away from Wednesday’s 33-month high, tumbling back to $1.3781. Against the euro, meanwhile, it was flat at a one-week-plus low of €1.1385.
The FTSE’s fall meant it was bedfellows with its Eurozone peers. The DAX was down 100 points, continuing its retreat from the week’s teases of an all-time high, while the CAC 40’s 0.6% drop left it at 5,630.
At the moment it’s looking unlikely that the US open is going to change the tone of trading. The futures are pointing to a 125 point decline for the Dow Jones, one that would drag the index back from its recent, 31.400-crossing record peak.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."