The FTSE 100 has been given a slight boost by the dip in the pound.
Sterling lost ground after a slightly dovish update from the head of the Bank of England last night. The prospect of a rate hike in the UK next month has now diminished, as the weakness in the pound is propping up the FTSE. On a wider basis, the geopolitical outlook hasn’t really changed, so continental markets are only slightly higher today.
Reckitt Benckiser shares are in the red the company missed analysts’ sales forecasts. Like-for-like sales increased by 2%, but traders were expecting 2.6%. Europe, Australia and New Zealand saw sales slip by 1%, while North America registered a 6% jump in revenue. The company confirmed it is on track to achieve sales growth of between 13% and 14% per year, but described the trading environment as challenging. The cautious outlook is weighing on investor sentiment and the stock is down 4.8%.
Barclays' CEO, Jes Staley, faces a fine after it was reported that he tried to identify a whistleblower in 2016. The regulator believes Mr Staley breached the requirement to ‘act with due skill, care and diligence’. Barclays have made it clear that the regulator is not calling into question Mr Staley’s ability to do the role.
GBP/USD is suffering today after Mark Carney, the governor of the Bank of England, warned last night that interest rates may not be hiked next month. Mr Carney said the UK has produced some ‘mixed data’ recently, and that monetary policy is more about a general path rather than precise timing. The pound had a positive run in the first two week of April, but traders are now exiting their long sterling positions.
EUR/USD is broadly unchanged this morning, and the slightly softer-than-expected PPI figures from Germany had little impact on the single currency. In March, German PPI came in at 1.9%, while economists were expecting 2%. We are not expecting any major economic indicators from the US today so the currency pair is likely to experience low volatility.
Baker Hughes and General Electric announce quarterly results today. We are expecting the Dow Jones to open down 50 points at 24,614 and we are calling the S&P 500 down 4 points at 2689.
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