The FTSE has posted gains on Thursday, after two losing sessions. Currently, the FTSE index is trading at 7,221, up 0.50% on the day. In the U.S., Preliminary GDP came in at 3.1%, matching the forecast. In the U.K., GfK Consumer Sentiment is expected to remain deep in negative territory, with an estimate of -12 points.
The Bank of England is anticipating soft economic growth for the U.K. Earlier in May, the bank’s projected growth of 1.5% in 2019 and 1.6% in 2020, and that is on the assumption that the Brexit process goes smoothly. On Thursday, Deputy Governor Dave Ramsden took issue with his MPC colleagues, saying that he is more pessimistic about the economic outlook and believes that growth will be less than the bank’s forecast. Ramsden warned that a no-deal Brexit without a transition period would have “large negative economic effects”. Ramsden added that even if the U.K. crashed out of the EU without a deal, it did not automatically mean that interest rates should be cut.
Reports that China has raised the ante in a bitter trade dispute rocked global equity markets on Wednesday. Chinese media has reported that China is threatening to curb the supply of rate metals to the U.S. These products are used in the production of items such as cell phones and electric cars, so any interruption in supply could hurt U.S. technology companies. Technology company listings on the FTSE, such as Micro Focus and Vodafone, posted sharp losses on Wednesday. Investors remain jittery over escalating tensions between the U.S. and China, and this latest salvo from China is a reminder that the trade dispute continues to cause turmoil on the equity markets.
Thursday (May 30)
- 8:30 US Preliminary GDP. Estimate 3.1%. Actual 3.1%
- 19:01 British GfK Consumer Confidence. Estimate -12
*All release times are DST
*Key events are in bold
FTSE, Thursday, May 30 at 11:25 DST
Previous Close: 7,185 Open: 7,189 High: 7,237 Low: 7,187 Close: 7,221
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