The rally in the pound has put the FTSE 100 under pressure. 

Europe

The FTSE 100 started off on the wrong foot as a pullback in the price of copper put pressure on mining companies, and then the surge in sterling due to the solid growth figures sped up the sell-off. Ultimately, a respectable growth rate in the UK economy will assist the equity benchmark in the long run, but for now the pound is putting pressure on it.

Eurozone stock markets are selling-off ahead of the European Central Bank (ECB) meeting tomorrow. The ECB is currently buying €60 billion per month, and traders are expecting the central bank to talk about reducing the monthly purchase rate.

Shares in Lloyds were helped along by the better than expected growth figures from the UK. The prospect of a rate hike from the UK next month has assisted Lloyds as banks earn usually earn more money in a higher interest rate environment. The bank revealed a 38% rise in nine-month profits today, and the company’s liquidity is improving also – both bode well for investor confidence. The stock is up fractionally.

Marks and Spencers shares are down 0.5%% after Jo Jenkins – the head of clothing, announced her resignation. The clothing department has often weighed on the company’s results, as the food division have been the star performer of the organisation.

GlaxoSmithKline shares have fallen to a one-year low as concerns grow about how much money will the three new drugs will earn. The company managed to improve operating margins by squeezing costs, but traders will want to see solid revenue streams from drugs to become more confident in the stock.  

US

The Dow Jones, S&P 500 and NASDAQ 100 are all marginally lower as traders look in their profits from the gains that have been made this month.

Earnings season continues and Chipotle – an S&P 500 competent, is down 14% after the company missed analyst expectations on earnings per share (EPS), revenue, and same-store-sales.

The Dow Jones is holding up better than the S&P 500 and the NASDAQ 100 as the former has been outperforming the other in the past few days.

It has been good day in terms of economic indicators for the US, as durable goods, core durable goods sales and new homes sales all rose on the month, and exceeded economists’ estimates

FX

GBP/USD has surged on the back of the UK economy growing by 0.4% and 1.5%, on a quarterly and yearly basis respectively. Economists were expecting growth to be 0.3% and 1.4%. The announcement has given hawks hope the Bank of England (BoE) will raise interest rates next month.

EUR/USD is creeping higher ahead of the tomorrows ECB meeting, where the central bank is tipped to discuss trimming the size of its monthly stimulus package. The ECB stated it will make the bulk of the decisions this month so traders are expecting a substantial announcement tomorrow.  

USD/CAD has gained considerable ground today after the Bank of Canada (BoC) kept interest rates on hold, and stated they were cautious about abut rate hikes down the line. The BoC announced there is some slack in the labour market, so they are in no rush to hike again. NAFTA talks have been pushed back until the New Year, and given the Fed are likely to hike in December, the BoC may sit on their hands until March 2018.

Commodities

Gold is off the lows of the session and is now flat on the day. The metal came under pressure from robust durable goods sales and housing data from the US, but the flight to quality effect kicked in the past hour. The decline in global stocks has assisted gold somewhat, but the upward move in the metal is relatively small when compared with the slump in stocks.

WTI and Brent Crude oil are weaker on the session as US oil inventory stocks came in well above expectations. The consensus was for a draw of 2.49 million barrels, and in fact there was a build of 856,000 barrels.

Gasoline inventories fell by 5.46 million barrels, while the market was only anticipating a draw of 1 million barrels, but for now traders have focused on the oil numbers.

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