The slide in sterling has helped push the FTSE 100 higher.
The British equity benchmark is benefitting from the pressurised pound as the chatter of a vote of no-confidence against Prime Minister May is doing the rounds. Continental Europe is broadly flat as traders still can’t be tempted to buy back into stocks given last week’s decline.
Shares in Taylor Wimpey are up 0.6% today after the company issued a positive trading statement. The homebuilder is being assisted by a low interest rate environment, the government’s help-to-buy scheme and a competitive mortgage market. The company is on track to achieve its 2017 target, and foresees further strength in 2018. Taylor Wimpey expects costs to rise by 3-4% this year, and it also stated it hasn’t seen any changes in customer’s patterns. The stock has been rising since June 2016, and it may target the all-time high of 211p.
Sterling is suffering today as traders ponder how long Theresa May has left in Downing Street. There is talk that a group of Conservative MP’s are planning on pushing for a vote of no-confidence, and this is putting pressure on the pound. Brexit talks haven’t gone great so far, and the resignation of two cabinet members recently has considerably weakened Mrs May’s position. Whether 40 Tory MP’s are actually planning to challenge her leadership or not has yet to be seen, but they talk of it is enough to send sterling lower.
EUR/USD is largely unchanged and the slowdown in German wholesale price index (WPI) nudged the single currency lower. On a year-on-year basis, German WPI slipped back to 3% from 3.4%, and the cooling of prices could suggests weaker demand.
Philadelphia Fed President Patrick Harker is likely to support an interest rate hike next month, even though he is slightly concerned about low inflation.
We are expecting the Dow Jones to open 10 points lower at 23,412, and we are calling the S&P 500 down 1 point at 2581.
Tyson Foods will announce their fourth-quarter results today.
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