FTSE fails to shake off corporate disappointments

Fiona Cincotta
By :  ,  Senior Market Analyst

The FTSE is seen limping into the close 0.3% lower, putting it on track for a weekly loss of around 0.7%. With nothing in the way of economic data, corporate news was driving trading. RBS remained under pressure throughout the session despite announcing a return to profit for the first time in almost a decade. 

Instead investors focused on UK and US regulatory settlements, in addition to higher restructuring costs in 2018, which are making them wary going forwards. British Airways parent company IAG was another standout loser, shedding over 3% across the session, despite reporting a 19% jump in full year operating profits. 

Results are about meeting expectations and IAG failed to hit the right note, falling short of what the market was looking for. 

US starts Friday higher, but will it last? 

Over in the US the final trading session of the week was looking more encouraging with the Dow, the S&P 500 and the Nasdaq all trading in positive territory, whilst treasury yields have eased back. 

On the whole we have seen stronger starts multiple session this week, before the rally runs out of steam and the markets finish lower, time will tell if that pattern holds today as well.

Although the US markets are clearly calmer than what they were at the beginning of the month, investors remain jittery over rising interest rate expectations and attention still remains firmly on the bond market. 

Investors look to Fed speakers 

With no high impacting data on the US economic calendar this afternoon, market participants will instead turn to comments from a long line up Fed officials, including New York Fed President Bill Dudley, Cleveland Fed head Loretta Mester, and San Francisco Fed President John Williams, all of whom are voting members of the Fed’s monetary policy committee. 

Given the sensitivity of the bond market right now, even slight moves towards a more hawkish tone could have a big impact on the markets.  

In the forex markets the dollar was continuing to move higher what can only be described as an unusually strong week. Dollar traders will listen closely to the Fed speakers, any hawkish signs potentially sending the dollar back towards 90.00 versus a basket of currencies.

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