Sterling Sits Near 7-Month Peak Before Wage Data

Equities

On Monday, the FTSE 100 managed a slight increase, largely buoyed by the performance of non-life insurers, amidst a backdrop of cautious trading ahead of key US inflation data releases later in the week.

Admiral Group saw its shares pop 4.9% to lead the FTSE 100, following Berenberg's revision of its target price upwards. The construction and materials sector faced headwinds, with Breedon Group's shares dipping 5.2% after UBS downgraded its stock rating and Morgan Stanley adjusted its target price slightly lower.

Currys fell by 5.4% following Elliott Advisors' announcement that it would not pursue an offer for the company. Furthermore, Vanquis Banking Group witnessed a stark 50% drop to a record low, after issuing a warning about significantly lower income expectations for 2024, compared to market estimates.

Shifting focus to the US, the S&P 500 and Nasdaq closed the day with slight losses, down 0.1% and 0.4% respectively, as investors braced for the upcoming consumer and producer price data releases. Boeing saw a 3% decrease in its shares amid news of investigations into a recent mid-air emergency involving an Alaska Airlines 737 MAX 9 aircraft.

The semiconductor sector also faced challenges, with significant companies such as Nvidia, Advanced Micro Devices, and Broadcom experiencing declines of 2%, 4.3%, and 1.2% respectively.

Forex & Commodities

The yen faced a significant drop against the dollar, marking its steepest daily decline in a month, influenced by comments from Japanese officials that quelled expectations of an imminent shift in the Bank of Japan's policy. This occurs as the market anticipates the central bank's next meeting, with speculation about ending its negative interest rate policy previously boosting the yen.

Meanwhile, the dollar remained steady, with investors keenly awaiting US inflation data for further insights into the Federal Reserve's rate adjustment timeline. The euro saw a retreat from a recent high, and sterling posted a marginal gain.

Gold prices edged up, trading near record levels, driven by expectations for the upcoming US inflation data. Speculators have raised their bullish positions in gold while Silver, platinum, and palladium also saw gains, underscoring a generally positive sentiment in precious metals.

Oil price gains were tempered by concerns over demand and the anticipation of monthly reports from key oil agencies. The conflict between Israel and Hamas, along with Houthi attacks on maritime vessels, has heightened concerns over supply disruptions, though the market remains cautious due to increasing output from non-OPEC producers.