UK markets look past botched reshuffle, oil at 2015 high

LLB Reporter

Source: ©Pexels

According to Jasper Lawler, head of research, London Capital Group

Stocks in Europe look set for a mostly weaker open on Tuesday following a more muted session on Wall Street. The FTSE 100 looks set for a positive open as UK markets look past PM Theresa May’s botched cabinet reshuffle. Bullish moves in commodities are underpinning the Basic Resource sector while other parts of the market appear to be pausing for a breath after a strong first week of the year. European banks with large operations in the US are pricing in a weaker set of Q4 numbers thanks to the short term impact of the new US tax plan.

In the absence of major drivers there were more record highs on Wall St. The S&P500 and Nasdaq made new records. The exception was the Dow, which was dragged down by healthcare stocks after a few weak updates from biotech firms. Attempts to undermine the Presidency over the mental health questions do not seem to be bothering stock markets. Talk that Trump may look to up the ante with China over trade could become a bigger theme in the coming days. New tarrifs on trade would be the protectionist side of Trump that markets feared before his election.

The dollar is staging a small comeback as the British pound and euro edge back from multi-year highs. Technicals are taking centre stage before a key inflation data at the end of the week. The inability of EURUSD to take out the old highs near 1.21 has led to a temporary capitulation of euro bulls.

Forex markets appear to be assuming Theresa May can live another day following a botched reshuffle of her cabinet. The British pound is flat against the dollar and up against the euro since two of the Prime Minister’s cabinet refused to change jobs in the reshuffle. Jeremey Hunt will remain where he is as Health Secretary and Justine Greening quit.

Related Articles

Text size

Desktop Site | Mobile Site