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FTSE kicks off the week behind European counterparts

Article By: ,  Senior Market Analyst
February 19, 2018 4:26 AM

After a positive close in the US on Friday and a strong finish overnight in Asia, bourses across Europe have moved out of the bloc in positive territory. The FTSE is only up a lacklustre 0.07% lagging behind its European counter. Given the US is closed, we are expected a slow start to the week characterised by low volumes. 

Trump lashes out on Twitter over Russia Investigation 

The Dow and the S&P closed higher on Friday, although off their session highs following the indictment of 13 Russians over interference in the US Presidential elections in 2016. 

Trump unleashed a series of Tweets lashing out at the FBI, Democrats and Security Chief. Following the incidence, the dollar sold off in in the early part of the Asian session but bounced off 89.00 and is now trading 0.1% higher. Given the US markets are closed for Presidents Day, low volumes and are expected across the day. 

Housebuilder tumble on disappointing house price data 

Housebuilders are a dominating the lower reaches of the FTSE after Rightmove Housing Index showed a slowing in growth in house prices. The data from Rightmove showed that house prices increased 1.5% year on year in February, up from the 1.6% forecast, however on a monthly basis, prices were up just 0.8%. This is well below the monthly average for this time of year and follows on from a monthly average of 0.7% in January. 

We are seeing caution dominate the housing market in a big way – those sellers that can wait are doing just that, in the hope that as Brexit uncertainties clear the housing market will pick up. Overall, these figures are painting a picture of a rather anaemic housing market, which is struggling in the face of Brexit uncertainties. Housebuilders are by far the biggest drag on the FTSE this morning with the likes of Taylor Whimpey, Barratts Development and Berkley Group shedding 0.4%, 0.1% and 0.2% respectively. 

Sterling eyes BoE Governor Mark Carney 

Sterling is seen extending losses in early trade on Monday after a sharp drop at the end of last week. GBP/USD is once again its finding solid support at $1.40. With no high impacting data due for release traders will look cautiously across to an appearance by Mark Carney this afternoon, especially given his hawkish tone at the BoE meeting last week. 

Technically the pair is looking to attack $1.40 on the near term. A move through this level could open the door to $1.3948, the 10 day sma. On the upside GBP/USD needs to clear $1.4146 (Friday high) before moving on to $1.4150.

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