FTSE Climbs For Fifth Straight Session

The FTSE remained in positive territory across the session, supported by a rebound in metal prices, which pushed the likes of Glencore, Antofagasta and Fresnillo to the top of the FTSE leader board. 

Meanwhile solid construction sector data also helped lift sentiment, pushing the FTSE to 7572, a level not seen since late January. well received after a string of worse than expected readings.

UK construction activity rebounds

The UK Construction pmi rebounded to 52.5 in April, better than the 50.5 forecast, after falling sharply in March to 47.  

The better than expected reading was well received following a string of worse than forecast prints for a wide range of indicators from GDP, manufacturing, wages, retail sales and inflation over the past month. 

Markets are also expecting a rebound in the dominant service sector in April, after March saw service sector activity almost fall into contraction. 

Yet even if we do see a rebound, it is highly improbable that the Bank of England will look to hike rates when they meet this month. The UK economy has proved to be considerably weaker than was initially though.

GBP/USD flat as investors eye FOMC

The pound, which had been hovering around 4-month lows, sub $1.36, rallied on the solid construction print, hitting a peak of $1.3676. 

However, any strength in the pair was short lived as investors turned their attention to the Fed’s rate decision this evening. 

Whilst the Fed is not expected to raise interest rates, investors will be watching closely for a more aggressive stance to hiking across the remainder of the year. 

Traders will go through the statement with a fine-tooth comb for clues on inflation expectations and the outlook for economic growth but the bottom line is a more hawkish Fed is widely expected.

Dollar higher ahead of the Fed

Ahead of the Fed and following better than expected ADP employment figures before of Friday’s non-farm payroll report, the dollar is trading higher for a fourth straight session, pulling 93.00 into target versus a basket of currencies. 

Dollar strength has also sent EUR/USD back below $1.20 despite a solid eurozone GDP reading. 

Fears over slowing momentum in the eurozone economy appeared to be unfounded in the first quarter as economic growth in the eurozone hit expectations of 2.5%.

The Dow and the S&P have gapped lower on the open for a second straight session as investors look ahead to the Fed. 

The Nasdaq bucked the trend, moving higher led by Apple as fears were quelled over waning iPhone sales and Apple reported better than expected results. 

Yet Apple, the largest company by market cap, gaining 4% hasn’t been enough to overshadow market concerns of a steeper path to tightening by the Fed later this evening, which is dampening demand for equities.