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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Smith & Nephew | 1293.5 | 51.5 | 4.2 | 0.4 |
| Bunzl | 2009 | 68 | 3.5 | -3.0 |
| Next | 5064 | 152 | 3.1 | 11.9 |
| Associated British Foods | 2861 | 77 | 2.8 | 1.5 |
| Mediclinic International | 629.2 | 12.4 | 2.0 | -3.1 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Sage | 750.6 | -17.6 | -2.3 | -5.9 |
| British American Tobacco | 4870 | -106 | -2.1 | -3.0 |
| Rolls-Royce | 844 | -17.6 | -2.0 | -0.4 |
| Imperial Brands | 2864 | -56 | -1.9 | -9.5 |
| International Consolidated Airlines | 637.2 | -12.2 | -1.9 | -2.1 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,615.8 | -27.6 | -0.36 | -0.9 |
| UK | 20,521.7 | -16.8 | -0.08 | -1.0 |
| FR CAC 40 | 5,481.2 | -14.0 | -0.25 | 3.2 |
| DE DAX 30 | 13,298.4 | -116.3 | -0.87 | 3.0 |
| US DJ Industrial Average 30 | 26,392.8 | 140.8 | 0.54 | 6.8 |
| US Nasdaq Composite | 7,411.2 | -3.9 | -0.05 | 7.4 |
| US S&P 500 | 2,839.3 | 1.7 | 0.06 | 6.2 |
| JP Nikkei 225 | 23,631.9 | -37.6 | -0.16 | 3.8 |
| HK Hang Seng Index 50 | 33,215.8 | 561.4 | 1.72 | 11.0 |
| AU S&P/ASX 200 | 6,050.0 | -4.6 | -0.08 | -0.2 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 65.43 | -0.48 | -0.72 | 8.8 |
| Crude Oil, Brent ($/barrel) | 70.28 | -0.46 | -0.65 | 5.5 |
| Gold ($/oz) | 1353.95 | -7.25 | -0.53 | 3.9 |
| Silver ($/oz) | 17.53 | 0.16 | 0.92 | 3.8 |
| GBP/USD – US$ per £ | 1.4209 | – | 0.41 | 5.2 |
| EUR/USD – US$ per € | 1.2448 | – | 0.45 | 3.8 |
| GBP/EUR – € per £ | 1.1415 | – | -0.04 | 1.4 |
Click graph to enlarge
UK 100 Index called to open +10pts at 7625, but in retreat from overnight highs of 7640. This keeps the index within the confines of a two-day falling channel that could usher us below yesterday’s 7610 low. Bulls need a break above 7640, if not 7650 to escape the channel. Bears need a test of yesterday’s 7610 lows to extend it. Watch levels: Bullish 7640, Bearish 7610.
Calls for a positive start come after US President Trump last night contradicted Steve Mnuchin by saying “The dollar is going to get stronger and stronger and ultimately I want to see a strong dollar", claiming his Treasury Secretary was misinterpreted, and adding fuel do the fire of concerns about a re-emergence of currency wars.
While Trump's comments took both GBP and EUR from their highs, thus helping the UK UK Index and German Dax off their lows, much of the FX moves have already been reversed overnight, ahead of Trump's Davos address later today, denting equity sentiment and seeing a return to the recent situation of weak USD hindrance on European share prices and indices.
UK corporate news this morning includes: AstraZeneca says Phase III KRONOS trial for PT010 for chronic obstructive pulmonary disease (COPD) shows superiority to existing treatments. Spectris acquires Concept Life Sciences for £163m cash.
Gulf Keystone receives $15m gross ($12m net) from Kurdistan Regional Government for September Shaikan crude oil exports. SolGold updates from Cascabel Project in Northern Ecuador, drilling focused on high grade extensions to Alpala resource. Amur Minerals receives final Quality Assurance/Control results for 2017 drill season.
Both the Dow Jones and S&P 500 closed at record highs yesterday as US equity markets traded mixed overnight, with the Tech-focused Nasdaq closing lower for a second consecutive day. All three indices pared early gains, with the Dow trading as much as 204 points higher before closing up 140 points thanks to strength from Boeing and 3M, the latter after results, while the S&P 500 also pared early gains to close just 0.1% higher.
Crude Oil benchmarks have pulled back from yesterday’s fresh 3-year highs, as President Trump’s strong dollar comments (at odds with his underling Mnuchin) saw the US dollar spike and hence the dollar-denominated commodities retreat. Despite this, both global benchmark Brent and its US equivalent have held above key levels, with the former finding rising lows support at $70, while the latter has bounced from $65 as the dollar edges back from its highs.
Gold is also trading lower as a result of the Trump-inspired US dollar strength, falling back below yesterday’s $1358 highs, however has already rallied from its $1345 overnight lows as the greenback edges back from its highs. Having rallied to $1355, traders of the precious metal will be closely monitoring President Trump’s 1pm address to Davos, as well as media interviews this morning, for any further dollar comments and their subsequent impact on Gold.
In focus today will be preliminary UK Q4 GDP (9:30am with consensus of 1.4% pointing towards an extension of a retreat from Q1 highs of 2.1%, to the lowest since Q2 2012. However, any shift away from consensus, to either the up- or down-side, is likely to have a substantial impact on a high-flying GBP and, in turn, the UK 100 index of FX sensitive blue-chips.
This afternoon, the first reading of US Q4 GDP (1:30pm) is expected to make it is a third consecutive quarter of growth of at least 3%, albeit off the Q3 high of 3.2%, which was its best since Q2 2015.
The final day of Davos sees President Donald Trump (1pm) deliver a highly anticipated address, as the first sitting US President to participate since Bill Clinton back in 2000.
The ECB’s Coeure also speaks alongside UBS Chairman Weber ‘The End of Easy Money’, while BoE Governor Carney discusses the ‘Global Economic Outlook’ with BoJ Chief Koruda and the IMF’s Lagarde. Note, Trump will also be interviewed on CNBC at 11am this morning.
Outside of Davos the Fed’s Bullard (dovish, non-voter) is scheduled to speak at 1pm.
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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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