FTSE: Financials send index sharply higher

The FTSE index has posted sharp gains on Friday. In the North American session, the pair is at 7,413, up 0.92% on the day. The pair lost over 1.0% on Wednesday, but has recovered most of these losses. In economic news, British Services PMI rose to 50.4 in April, up from 48.9 in March.

HSBC reported an excellent first quarter on Friday, helping boost the blue-chip FTSE. The bank reported that Q1 net profit jumped 33.7% on a year-to year basis. Net profit rose to $4.13 billion, beating the estimate of $3.70 billion. There was further positive news from Anglo American, a mining company which is the world’s largest producer of platinum. Shares of the company have climbed 2.3% on Friday.

All eyes were on the BoE on Thursday, as the bank held its monthly policy meeting. The bank maintained interest rates, but BoE Governor Mark Carney had a hawkish message (warning?) for the markets. Carney said that there could be a number of rate hikes from the bank, if Brexit is resolved and growth and inflation point higher. The markets have priced in just one rate hike until 2021. Carney’s comments didn’t make much of an impact on investors, as the pound was unchanged on Thursday.

The BoE followed the lead of the Federal Reserve, which left rates unchanged on Wednesday. The rate statement noted that inflation pressures are muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance at a follow-up press conference, saying “we don’t see a strong case for moving in either direction”. The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

Post-FOMC hangover

Brent crude – Correction over or just beginning

Economic Calendar

Friday (May 3)

  • 4:30 British Services PMI. Estimate 50.4. Actual 50.4

*All release times are DST

*Key events are in bold

FTSE, Friday, May 3 at 9:15 DST

Previous Close: 7,413 Open: 7,364 High: 7,415 Low: 7,357 Close: 7,413

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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