The FTSE 100 is the outperformer in Europe this morning as the weakened pound is keeping the index in positive territory..

The spike in the pound after the UK inflation report was short-lived, and this assisted the British equity benchmark.

Ashtead revealed a solid first-half update, as revenue and pre-tax profits rose by 20% and 23% respectively. The equipment rental company saw an increase in demand due to the clean-up of hurricanes, Irma and Harvey.  The price is up 4% today and hit yet another record-high – so sentiment is clearly bullish.  

Brent Crude oil hit its highest level since early June 2015 as the closure of Forties North Sea pipeline curbed supply. The energy market was already strong as OPEC and Russia agreed to extend the co-ordinated production cut until the end of 2018, and now this maintenance move by Forties has added to the upward pressure.

GBP/USD was initially jolted higher by the jump in British inflation, sterling as reversed it positive move since, and is now in the red. UK CPI rose to 3.1% in November, up from 3% in October, and economists were expecting it to remain steady. The UK hasn’t seen an inflation level this high since April 2012. The pound has been rising versus the US dollar since March, and today’s announcement could help keep that trend in place.

EUR/USD has been helped along by the slight dip in the US dollar. The greenback has weakened a bit since Friday’s US non-farm payrolls report. Traders could also be trimming their US dollar positions ahead of the US Federal Reserve meeting tomorrow. The German ZEW report came in at 17.4, and traders were expecting a reading of 18.

At 1.30pm (UK time), the latest US producer price index data is released. Traders are expecting a reading of 2.9% year-on-year, and that compares with the previous reading of 2.8%.

We are expecting the Dow Jones to open up 20 points at 24,406, and we are calling the S&P 500 up 2 points at 2661.


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