The FTSE 100 is higher on the day as stocks rebounded after yesterday’s sell-off.

Traders have gotten to grips with the surprise that three members of the Bank of England (BoE) voted to hike interest rates. Bargain hunting is in play today as dealers pick up cheap stocks. The political situation in the UK seems to be improving, as the Queen’s speech will take place on Wednesday, even if the Conservatives don’t have a deal in place with the Democratic Unionist Party (DUP) by then. This sign of political stability has added to the boost in investor confidence.

Tesco is lower on the day despite posting a 2.3% rise in like-for-like sales for the first quarter, and analysts were expecting an increase of 2.2%. The fresh food division performed well, and the supermarket is trying its best to keep prices down in this rising inflation environment.

The Nikkei 225 closed up 0.56% after the Bank of Japan (BoJ) voted to keep their monetary policy unchanged. The BoJ have a very loose monetary policy in place, and it appears to be slowly taking effect, as there has been improvements in employment and private consumption is rising.  

The GBP/USD has been trading within a tight range, the pound hasn’t made any more gains versus the US dollar in the wake of the surprisingly hawkish BoE vote yesterday, but neither has it given up much ground.

We are expecting the Dow Jones to open 31 points higher at 21,390, and we calling the S&P 500 4 points higher at 2436.

At 1.30pm, the US will release the building permits and housing starts numbers for May, and the consensus is for a reading of 1.25 million and 1.23 million respectively. The preliminary University of Michigan consumer sentiment report will be announced at 3pm, and traders are anticipating a level of 97.2. The President of the Federal Reserve of Dallas, Robert Kaplan, will be speaking in Dallas at 5.45pm.

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