Sterling is gaining value this morning as the currency looks to put last week’s disappointing data set behind it and recoup some of the recent declines. The FTSE 100 is little changed and has experienced fairly quiet trade since the open.
BHP Billiton (LON:BLT) spikes higher
The best performing stock on London’s leading index this morning is BHP Billiton which has risen a little more than 5% after the release of a plan from an activist investor to unlock shareholder value by delisting from the London Stock Exchange. Elliott Advisors has said that the mining firm could increase value attributable to shareholders by more than 50% for London shareholders. The rise in price is boosting other stocks in the sector with Rio Tinto (LON:RIO) and Glencore (LON:GLEN) both gaining since the open.
Gold fails at key technical level
A sharp reversal in gold futures after the London close on Friday has seen both Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) begin the week lower, with the precious metal falling after some hawkish comments from Fed member Bullard. The market spiked to its highest level since the night of the US election early on Friday as the US responded to the Syrian chemical weapons attack with an assault on an airbase. A major breakout above the 200-day SMA seemed on the cards when the US jobs report showed the lowest reading since June 2016, but the fact that the market closed back near its lows perhaps reveals an underlying weakness and could suggest that the market has topped for the time being.
Yellen steps into the spotlight
One of the main takeaways in the release of last week’s minutes from the most recent monetary policy meeting of the US central bank was the discussion amongst members of reducing the balance sheet. Bullard commented on Friday that he believed the reduction could begin this year and this additional step in tightening monetary policy alongside expected increases in the base rate could lead to a boost in the buck and weakness in precious metals. This evening just after the Wall Street close Fed chair Yellen will deliver a speech at the University of Michigan and any further comments relating to balance sheet reduction could cause moves in the greenback and dollar-denominated commodities.