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Defence win for BAE Systems lifts FTSE 100

market relief

market relief

European stocks market are in positive territory today as geopolitical tensions cool. 

Traders are in risk-on mode this morning as global political and environmental factors return to normal. The standoff in relation to North Korea is still ongoing, but seeing as there has been no fresh negative developments, dealers are happy to buy into stocks.

Shares in BAE Systems are up 2.7%% today after the defence company announced the sale of 24 eurofighter typhoon aircrafts to Qatar. The value of the sale wasn’t disclosed but it is likely to be in excess of £1 billion. This stock is at its highest level since the 2nd of August when the company took a knock after it stated its intelligence division would be incurring a restructuring charge. That announcement sent the stock to a six month low. Last month, Goldman Sachs added the stock to its conviction buy list, citing Saudi Arabian contracts as the reason behind the move, and now they are selling to Qatar too.

Average UK house prices fell by 1.2% in September according to Rightmove. That follows a 0.9% drop in August. On the back of this we are seeing a slight decline in the share price of Barratt Developments, Berkeley Group and Taylor Wimpey.

The EUR/USD is a touch stronger this morning and the eurozone inflation figures helped which ticked up to 1.5% in August from 1.3% in July.

The GBP/USD is largely flat today as traders await for the Governor of the Bank of England (BoE), Mark Carney, to give his speech in Washington DC at 4pm. We have been hearing hawkish commentary from the BoE lately, and that is why the pound is near a 15 month high against the US dollar.

We are expecting the Dow Jones to open 52 points higher at 22,320, and we are calling the S&P 500 up 4 point at 2504.

At 3pm, the US will announce the National Association of Home Builders (NAHB) index and the consensus is for 67, and that compares with 68 in August.  


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