House builders lead FTSE higher

Fiona Cincotta
By :  ,  Senior Market Analyst
Two volatile trading days into the week and the FTSE seems to have come up for a bit of air.  The positive impetus came from a stronger close on Wall Street after comments from the Federal Reserve which the market interpreted as a signal of an imminent rate cut.

The forward market in currencies is now pricing in potentially as many as three interest rate cuts this year which may be slightly optimistic given that the US economy is currently fairly stable. Domestic indicators are showing GDP growth of 3.2%, up from last year when it was 2.6%. Despite calls from President Trump for the Fed to start cutting rates more than one increase may be a bit of an overkill.

In London, house builders and home improvement companies are leading the FTSE higher, as are airlines and travel companies. Shares in Anglo-US cruise operator Carnival were in demand ahead of a dividend payout next week but this could end up short lived now that the US has banned cruises from the US to Cuba, a punitive move for Cuba’s support of the regime in Venezuela.

Sterling in limbo ahead of leadership contest

The Tory leadership contest is keeping sterling in a tight range although the currency did nudge higher this morning. With 12 candidates currently in the running there is a range of policies on the table but it seems unlikely that the party will chose a conciliatory figure given that this was one of the main criticisms made against Theresa May.

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