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Strong sterling still hurting FTSE 100

The FTSE 100 is in the red as the push higher in the pound is hurting the British equity benchmark. 

The Social Democrats in Germany are to meet with Angel Merkel’s Christian Democratic Union, and there are hopes the two sides can come to an agreement and form a grand coalition, and the DAX is up on the back of that.

 

Greene Kings shares are down 3% after the company posted an 8% drop in first-half profits. The company also stated it is planning on disposing of between 50 and 60 pubs, and that like-for-like sales fell by 1.4%. The pub operator cited weakened consumer demand and increased costs for the drop in earnings. The stock has been in declined for two years and if the bearish move continues it could target 470p.

 

WTI and Brent Crude oil will be in play today as OPEC will announce their plans in relation to production levels. There is speculation the production curb that is in place until the end of March 2018 will be extended until the end of December 2018. 

 

GBP/USD is continuing its push higher as the political situation in relation to Brexit appears to be improving. Now that the UK and EU have agreed an exit bill, there is now talk the two sides are nearing an agreement over the Irish boarder, and this is helping the pound.

 

EUR/USDis weaker this morning as the US dollar is still enjoying a bullish move. Upbeat comments from Fed Chair Janet Yellen about the health of the US economy, and stronger than expected US GDP yesterday are still propping up the greenback. The US Senate is expected to vote on the tax reforms today. Eurozone CPI ticked up to 1.5% from 1.4% in October, but traders were expecting a reading of 1.6%.  

 

At 1.30PM (UK time) the US will announce the core personal consumption expenditures (PCE) index, and economists are expecting a reading of 1.4%, up from 1.3% in September. The PCE is closely watched by the Federal Reserve and the report may give us a clue as to what lies ahead in terms of US central bank policy.

 

We are expecting the Dow Jones to open up 40 points at 23,980, and we are calling the S&P 500 up 2 points at 2628.

 

Barnes & Noble will announce their second-quarter figures today.

 

 

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