The FTSE 100 is trading higher by around 20 points this morning as the feel-good factor from the tail end of last week persists to continue to provide a boost to stocks. The combination of a monetary stimulus package from the BoE that exceeded expectations and a second successive strong US jobs report have boosted shares around the globe with bourses from Tokyo to Frankfurt joining London and New York in moving higher.
Banks amongst the best performers
Banking stocks are enjoying a bullish start to the week with Barclays (LON:BARC) heading the UK index in gaining almost 4% in early trade. Standard Chartered (LON:STAN) and HSBC are also moving higher with the fears that a lower base rate from the BoE, which would typically be seen as negative for these institutions, being alleviated somewhat due to the unveiling of the term funding scheme which is intended in part to soften the blow of lower rates for banks. Elsewhere mining companies including BHP Billiton (LON:BLT) and Anglo American (LON:AAL) are in the green, largely due to the latest Chinese economic data released overnight which showed a higher than expected trade balance for July. At the foot of the index is Hikma Pharmaceuticals (LON:HIK) which continues to exhibit volatile trade after last week’s earnings disappointment.
Light economic calendar ahead
The week ahead has relatively few major economic releases from the UK compared to last time out, with manufacturing production for June - which is due to be released at 09:30 tomorrow - the only real event of note. As always comments from BoE members could prove market-moving, but it seems quite likely that in the absence of any fresh developments the markets will continue to be driven by last week’s events. The Pound remains under pressure so far this morning, with the currency weakening against both the Euro and the US dollar.
OPEC to meet next month
An unexpected announcement on the OPEC website that the organisation will hold an informal meeting in late September has sparked fresh rumours that there may be some collaboration on output levels to support the oil price, but this still seems more a case of wishful thinking than a material development. The price of Brent and WTI are around the same levels they were when OPEC last met in early June and decided to keep production at current levels, therefore unless we see another significant leg lower before this meeting then it appears farfetched to believe they will change their stance. Nonetheless, short term there has been an uptick in both crude benchmarks with Brent higher by more than a percent on the day.