By Samuel Indyk
Investing.com – The FTSE 100 ended a subdued week on a high with the index staging a rally led by the Oil & Gas sector. The gains in the sector came as WTI and Brent crude futures both moved to session highs ahead of the long weekend in the US.
UK news flow has been relatively light but some of the “reopening” names have underperformed with InterContinental Hotels Group PLC (LON:IHG) and Whitbread (LON:WTB) near the foot of the FTSE.
Mitchells & Butlers (LON:MAB) is weak for a second consecutive day while cruise operator Carnival PLC (LON:CCL) (NYSE:CCL) shares are treading water. SSP Group PLC (LON:SSPG), the owner of food concessions in airports and railway stations – has seen shares rebound after tanking on Thursday following news that they are looking to raise fresh funds.
In FX markets, the GBP is strong with GBP/USD holding above 1.3800 following UK GDP. The figure wasn’t as bad as some had feared and although growth is expected to have contracted in Q1, there is room for cautious optimism about where the UK economy is heading. Gilts traded lower in the UK with the 10-year yield climbing back above 0.5%.
In the cryptocurrency space, Bitcoin pared back some of the monster gains seen in the last week. The world’s largest cryptocurrency by market cap has had a huge rally after it appears the corporate world is beginning to accept that digital assets are here to stay. Twitter Inc (NYSE:TWTR), Mastercard (NYSE:MA), and Bank of New York Mellon (NYSE:BK) have all spoken and embraced cryptocurrencies this week which started with Tesla Inc (NASDAQ:TSLA) announcing they had bought $1.5bln worth of bitcoin to diversify their reserves.
LOOKING AHEAD
Next week, the Office for National Statistics (ONS) releases retail sales and inflation figures. CPI is expected to have ticked lower to 0.5% YoY in January from 0.6% in December. Core CPI – which strips out food and energy – is also expected to tick lower to 1.3% from 1.4% the month before.
January’s retail sales will be closely watched for the strength of the consumer, but the data point is known to be volatile and can be hard to predict month to month. The nationwide lockdown has seen non-essential shops closed for the whole of January and expectation is for retail sales to have fallen 1.0% MoM in January.
Friday will also see the flash release of the IHS Markit’s purchasing managers index for February. Last month the services sector had the fastest decline in business activity since May although respondents to the survey were optimistic with growth expectations at their highest for nearly seven year.
Elsewhere, next week sees minutes from the latest meetings of the Federal Reserve, European Central Bank and Reserve Bank of Australia. There is also a Eurogroup meeting on Monday to keep an eye on and preliminary GDP reading from the Eurozone.