Spreadex Market Update

FTSE starts to claw back last week’s losses following Brent Crude rebound



A quiet Monday began with the European indices clawing back some of last week’s losses, the FTSE especially benefiting from a Brent Crude rebound.

The UK index rose 0.4% after the bell, leaving it around 40 points away from the 7500 mark it abandoned as oil began to fall. Its commodity stocks are driving the comeback – BP and Shell are both up 0.8%, while there is a remarkably consistent level of 1% growth in the mining sector – following Brent Crude’s own $46 per barrel-crossing 1.5% rise. The FTSE will be hoping that its sub-$45, 7 month lows seen last week will have been the floor for Brent Crude’s latest bout of bearishness, though the slightest increase in production from places like Libya, Nigeria and the US could put the commodity back in a funk.

"As the week goes on any signs as to whether or not the Prime Minister will be able to gather the required DUP votes to ensure she stays in power is going to be the main driver of trading for the pound."

Sterling started the week in a fairly good mood, climbing 0.2% against both the dollar (where the pound’s now at a one week high) and the euro. The UK’s post-election political uncertainty potentially comes to a head this week, with the parliamentary vote on the Queen’s speech, and therefore May’s ability to form a government, likely coming on Thursday. As the week goes on any signs as to whether or not the Prime Minister will be able to gather the required DUP votes to ensure she stays in power is going to be the main driver of trading for the pound.

Over in the Eurozone the region’s indices were pretty perky. The DAX was back above 12800 with a 0.6% rise, while the CAC climbed 0.8% to clamber back past 5300. There’s not a lot on offer for the Eurozone this Monday beyond the German Ifo business climate reading, which is expected to nudge to a fresh pre-financial crisis high of 114.7.

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