Streaking FTSE hits 6-week high as trade tensions ease over Mexico, China

The FTSE continues to move higher. Currently, the index is trading at 7,396, up 0.29% on the day. On the release front, British employment numbers were mixed. Unemployment rolls dropped slightly to 23.2 thousand, but this was much higher than the estimate of 12.3 thousand. Wage growth slowed to 3.1%, down from 3.2% a month earlier. Still, this beat the estimate of 2.9%. In the U.S., producer price index reports matched their estimates. PPI dipped 0.1%, down from 0.2% a month earlier. Core PPI edged up 0.2%, up from 0.1% in the previous release. On Wednesday, the U.S. releases consumer inflation reports.

There were fears that President Trump would slap Mexico with new tariffs, opening up another trade war front. The tariffs were set to take effect on Monday, but the U.S. suspended the tariffs, after talks between U.S. and Mexico helped defuse the latest crisis. Although the U.S. has said that the tariffs could be imposed if the illegal immigration crisis continues, investors are pleased that Trump has backtracked. There are also hopes that the bitter trade dispute between the U.S. and China will ease. At a G-20 meeting, finance ministers agreed on a joint communique to reduce trade tensions. There are hopes that progress towards a trade agreement will be made before President Trump and President Xi of China meet at the G-20 summit in Japan in late June. Risk appetite has improved, and the FTSE has gained 3.4% in June, recovering most of the losses seen in May.

Green Across the Board as Trade Optimism Brews and Trump attacks Fed

GBP/USD – Buoyed by UK jobs data

Economic Calendar

Tuesday (June 11)

  • 4:30 British Average Earnings Index. Estimate 2.9%. Actual 3.1%
  • 4:30 British Claimant Count Change. Estimate 12.3K. Actual 23.2K
  • 4:30 British Unemployment Rate. Estimate 3.8%. Actual 3.8%
  • 5:16 US NFIB Small Business Index. Estimate 102.3. Actual 105.0
  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.2%
  • 8:30 US PPI. Estimate 0.1%. Actual 0.1%
  • 10:00 US IBD/TIPP Economic Optimism. Estimate 59.2. Actual 53.2

Wednesday (June 12)

  • 8:30 US CPI. Estimate 0.1%
  • 8:30 US Core CPI. Estimate 0.2%

*All release times are DST

*Key events are in bold

FTSE, Tuesday, June 11 at 11:50 DST

Previous Close: 7,375 Open: 7,396 High: 7,421 Low: 7,396 Close: 7,396

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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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