The FTSE 100 is still above the 7500 mark even though we have seen a small pullback this morning. Last night, the minutes from the Federal Reserve’s latest meeting showed that policymakers are optimistic about the US economy, but they want to be sure the recovery is stable before tightening monetary policy. The Fed aren’t keen to rush further interest rate hikes, and that has helped stocks overnight.
The GBP/USD remains below the $1.30 mark after the UK GDP second estimate for the first quarter was revised lower to 0.2%, from 0.3%. The British Bankers’ Association (BBA) mortgage approvals for April were 40,800, meeting estimates, but it declined from 41,100 in March.
WTI and Brent oil hit a five week high this morning before quickly dropping after the oil minister for Saudi Arabia stated there will be a nine month extension to OPEC’s oil production cut. There will be a press conference later today to expand on the details. Oil has been creeping higher recently in anticipation of an extension to the production cut, and now that it has been confirmed, the buyers are closing out their positions.
In the US, we are expecting the Dow Jones to open 60 points higher at 21,072, and the S&P 500 to open at 2409, up 5 points. US stock index futures are carrying on from last night’s strong close after traders found out that the Fed aren’t overly hawkish Investors believe that more interest rate hikes are in the pipeline, but the US central bank wants to ensure that the recovery continues before acting. In terms of economic announcements, jobless claims and preliminary wholesale inventories will be released at 1.30pm. Abercrombie & Fitch, Best Buy and Costco will reveal their quarterly figures later on.
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