The FTSE dropped yesterday ending down 9.36 points (or 0.2%) at 4,722.20, after reaching a 10-month closing high on Friday. Miners were the worst performers on the index. Last week investors booked profits from substantial gains in miners and banks.
US stocks fell as investors booked profits following a four-week rally. Yesterday, the Dow Jones industrial average lost 32.12 points (or 0.34%) to close at 9,337.95. Yesterday, the S&P 500 index fell 3.38 points (or 0.33%) to close at 1,007.10. Yesterday, the Nasdaq dropped by 8.01 points (or 0.4%) to close at 1,992.24. There is an abundance of economic data due for release this week, including the Federal Reserve interest rate statement and government figures for monthly retail sales.
Today Royal Institution of Chartered Surveyors (RICS) house price balance came in at -8.1, better than the expected -10.0, and the highest reading since August 2007. According to the Markets UK Regional Purchasing Managers Indices (PMI) London had the steepest rate of job cuts in July. Employment was found to be falling at its fastest rate for 5 months. The British Retail Consortium (BRC) today released figures showing that the retail sales values rose by 1.8% on a like for like basis compared to last July.
Food retail sales rose 4.2%, whilst non-food fell 1.4%. Tomorrow’s, BOE quarterly inflation report and June jobs data remain obstacles to further gains. This week all eyes are on the record £75bn US debt sale by the US treasury and Federal Reserves. The Federal Reserve meeting finishes tomorrow, the sale is set to open around two hours before the end of the two-day meeting, there is concern in the market that this could cause diminished demand.
EUR/USD little changed, overnight and the EUR/USD is currently bouncing around the 1.4149 level. Cable has drifted a little lower in early European trade but has made some gains now at the 1.6486 mark. The JPY has gained strength with the USD/JPY down at 96.80. JPY has benefited from disappointing Chinese data. The main reason for the USD to rebound late last week; was the markets anticipation that the Fed might exit from its zero interest rate policy sooner than expected.
The US currency advanced strongly on Friday, gaining more than 2 per cent against the yen and more than 1 per cent against the euro and the pound, following the release of stronger-than-expected US jobs data.
Today Gold is at 949.40 USD, Brent Crude is at 73.83 USD and Copper is currently at 279.50 USX.
Due for release today there are a variety of releases, GBP Visible Trade Balance (JUN), GBP Total Trade Balance (JUN), CAD Housing Starts (JUL), USD Non-Farm Productivity (2QP), USD Unit Labor Costs.
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