Consumer goods stocks like Tesco and Reckitt Benckiser climbed as shoppers stock up before Christmas.
Spanish stocks will be in focus today as dealers react to the outcome of the Catalan regional elections where the separatist parties won an absolute majority in the regional parliament. This result will not be welcomed by the Madrid government who were hoping this snap election would reduce the calls for independence, and today’s result will keep the issues on the table.
US equities had a strong finish last night as some major American companies like Comcast, AT&T, Wells Fargo and Boeing pledged to spend more on wages in light of the tax reform. The combination of a more pro-business corporate tax rate, tax cuts for worker, and the potential for wages increases too could be a big boost for the US economy. Average earnings growth has lagged behind job creation growth, and if more companies pledge higher earnings it could be a major shot in the arm to the US economy.
The House of Representatives voted in favour of a short-term funding bill which will see the US government being funded up until mid-January. It is expected to be passed in the Senate too, and it may pave the wave for President Trump to be able to sign-off on the tax reforms as soon as today.
At 9.30am (UK time) the UK will announce the third-quarter GDP figures, and economists are expecting the reading to remain unchanged at 1.5%. The British economy has been ticking along nicely, and broadly speaking the economic indicators have been positive.
Mark Carney, the governor of the Bank of England, stated the UK banking system is well financed enough to cope with Brexit, and stated a transitional phase post March 2019 would be beneficial to the British financial sector. The pound has had an impressive 2017, especially when you consider what sharp it was in at the start of the year.
EUR/USD – has been edging higher since mid-December and if it holds above the 100-day moving average at 1.1800 it could target 1.1961, and a move through that mark might bring 1.2000 into play.Support could be found at 1.1670.
GBP/USD – has been pushing higher since March and is above the trend line support which comes into play in the 1.3300 region. Rallies could encounter resistance at 1.3548 or 1.3659. A move below 1.3300 may send the market to 1.3200.
EUR/GBP – has been edging higher since early December, but has managed to move slip below the 50-day moving average at 0.8860. If it falls further from here it could find support at 0.8800. If it retakes 0.8860, it could target the 100-day moving average at 0.8938.
USD/JPY – has pushed above the 50-day moving average at 112.89, and if it holds above that metric it could target the 114.00 region, and a break thought that price might put 114.73 on the radar. Support might be found in the 112.00 area. A break below 112.00 could find support in the 111.00 region.
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