CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

FTSE Drops Lower in Lacklustre Session

Article By: ,  Senior Market Analyst
February 19, 2018 10:48 AM

In a slow, uninspiring session, caught between US Presidents Day public holiday in the West and Lunar New Year in the East, the FTSE struggled to keep its head above water. After a short spell in the black, the FTSE slipped deeper into the red as Monday’s session progressed.

The construction sector was unable to shake off the most recent housing price data which showed price growth was well below average for the second straight month, fuelling concerns over the health of the housing market. Elsewhere on the FTSE, the banking sector was pointing to a fairly solid performance as investors prepare for barrage of earnings from the banks across the rest week.

Busy week for the banks

HSBC will kick off with earnings tomorrow, which are expected to be a high point for the bank as it is expected to return to growth after a decade of declining revenue. This will be followed by Lloyds on Wednesday, where investors will be paying particular interest to any dividend increase as key to the future performance of the stocks price. Barclays will update the market on Thursday and finally Royal Bank of Scotland on Friday.

Sterling below $1.40 boosting the FTSE?

It is also worth noting that these updates from the banks come at a time when the Bank of England could be looking at adopt a more hawkish approach to monetary policy over the coming months, producing a higher interest rate environment, which is beneficial for the banking sector. Mark Carney is due to speak later this evening at 18:45 GMT, which could induce some volatility into the pound in an otherwise lacklustre session, potentially paving the way for a more notable move on the FTSE, on the open tomorrow.

The FTSE has failed to recover from the recent global equities sell off in the same remarkable way as Wall Street or even the Dax. Whilst earnings could give the FTSE the much-needed boost that it is looking for, investors may need to sit tight until Wednesday for the UK wage data, which, if disappoints could bring the pound back below $1.40 and offer support to the FTSE index.

A word on oil

Oil has continued to climb higher at the start of the week, despite the weaker dollar. WTI is seen extending its rally as positive fundamental are overshadowing concerns of increasing US production. Friday’s Baker Hughes rig count went some way to calming nerves as only 7 new active US rigs were added, compared to 26 the week before. Furthermore, with OPEC firmly in control of the oil production limits and the OECD forecasting greater demand for oil going forwards, it is easy to see why the bears are back targeting $63.50.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024