Spreadex Market Update
Sterling nudges higher ahead of services PMI
"The FTSE has already received a bit of good news this Wednesday, in the form of Tesco’s half year results."
p class="byline"> Analysts are forecasting the services reading will nudge higher, ever so slightly, from 53.2 in August to 53.3 in September. The fear is that this estimate will be way off base, as was the case with the manufacturing and construction figures earlier in the week.
Sterling has been softened up by those weak readings, and though its up 0.1% against both the dollar and the euro, it is primed for another chunky fall if the services data underperforms expectations. The FTSE, which has opened flat just below 7470, is likely rubbing its hands in glee at the prospect of another pound plunge – such a drop from the currency could help the UK index cross the 7500 for the first time in 2 months.
The FTSE has already received a bit of good news this Wednesday, in the form of Tesco’s half year results. The supermarket posted like-for-like sales growth of 2.2%, likely thanks to maintaining ‘the lowest food price inflation for customers’ amongst its peers, leading to a whopping 71.8% surge in interim operating profit to £885 million. Not all of the figures were stellar; for the second quarter UK like-for-likes came in at 2.1%, down from the 2.3% in Q1. However, investors could forgive that stumble, especially since Tesco announced it was restoring its dividend to the tune of 1p per share, sending the stock more than 1.5% higher to a near 6 month peak.
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