FTSE outperforms on softer pound Apple weighs on Wall Street

A weaker pound lifted the FTSE on the open and the index managed to hold onto this gains across the session, despite weakness from Reckitt Benckiser following weaker than forecast revenue and Shire paring some gains from the previous session as the takeover battle evaporated almost as quickly as it arrived.

With the withdrawal of Allergan from the pursuit of Shire, the takeover battle was over, however Japanese Takeda was in no mood for giving up after having their bid on a Thursday rejected and today they lifted the offer to £47 per share, up from £46.50 and valuing the firm at £42.8 billion.

On news of the lifted offer Shire’s share price increased although remain down 2.5% on the day.

Pound continue’s to fall

The pound, which has plummeted over 300 points since its peak on Tuesday, continued to drift lower as investors digested the week’s events; a hat-tick of weaker than forecast high impact releases and a warning by Bank of England Governor not not bet on a May interest rate rise.

A disappointing week by any stretch and one that sees the pound edging within touching distance of $1.40.

Higher yields and weaker Apple pulls Wall Street lower

US treasury yields have continued climbing on the final trading session of the week, boosting the dollar whilst dampening the mood for US equities.

With help from a 3% loss on Apple, Wall Street edged lower in early trading, with the Dow and the S&P down 0.5% Concerns over higher inflation boosted yields a few months ago causing a correction in US equity indices.

So far investors haven’t been responding with the same vigour as in February, but there is certainly a nervousness on the trading floors, which when combined with the fears over smart phone sales is preventing the markets from responding well to stronger than forecast earnings from GE.

EUR/USD to $1.2250?

Higher yields boosting the dollar and damaging comments from the President of the German Central Bank, Weidmann, has pulled the EUR/USD down 0.6% to $1.2270 as it looks to target $1.2250.

Weidmann commented that Q1 growth for Germany was not brilliant, doing little to quell fears over slowing momentum in the eurozone as a whole.

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.