UK Prime Minister Theresa May announced over the weekend that the formal process of beginning the country’s exit from the European Union would occur by April next year. The news that Article 50 will be triggered in the not too distant future has caused the pound to slump to its lowest level in over two months against the US dollar and seen stocks rally.
UK manufacturing exceeds expectations
This morning saw the leading economic indicator for the UK manufacturing sector in September beat expectations. A reading of 55.4 was the highest so far this year and is the second time in a row that this indicator has come in well above consensus forecasts. The release was the first of three key data points this week, with Wednesday’s services equivalent seen by many as the most important. A strong print on the services PMI would support today’s data and provide further evidence that the UK economy has rebounded strongly after the initial knee-jerk reaction to the Brexit vote.
Oil majors lead the way higher
Royal Dutch Shell (LON:RDSa) and BP (LON:BP) have built on last week’s strong gains this morning as the price of oil has risen to its highest level in over a month. Mining stocks are also enjoying a bright start to the week with Anglo American (LON:AAL), Antofagasta (LON:ANTO) and BHP Billiton (LON:BLT) all firmly in positive territory at the time of writing. As far as the laggards go, ITV (LON:ITV) trades at the foot of the FTSE100 and is lower by just over 1%. There’s also some noticeable weakness in the retail sector with Marks & Spencer and Next both trading in the red.