Spreadex Market Update
FTSE sees gains dissipate as Budget approaches; US inflation set to arrive ahead of this evening’s Fed statement
Remaining unchanged at a 10 year low of 5.1%, the UK unemployment rate was joined by a better than forecast rise in wage growth (to a still slightly disappointing 2.1%) and an increase in the claimant count change, which fell by 18k compared to the expected 8.8k drop. Add to this the fact that Brent Crude has made up some of the ground it lost at the start of the week (now re-approaching $39.50 per barrel) and things were ostensibly looking up for the FTSE. Yet a combination of pre-Budget nerves, and a more general tentativeness ahead of this evening’s statement from the Federal Reserve, caused the UK index to lose whatever mildly green glow it began the day with, its gains shrinking to a mere 6 points.
Battling the Budget for investors’ attention this afternoon is a cavalcade of US data, none more important than the latest inflation figure. Expected to slide into negative territory once again after last month’s 0% stagnation, today’s inflation fall will likely clip the wings of any nascent hawks in the Fed, cementing the chances of inaction when Janet Yellen gives investors a peak into the mind of the central bank this evening. Beyond the inflation reading the latest housing starts, building permits, capacity utilization rate and industrial production figures provide the markets with a wall of data to process, the prospect of such an imposing afternoon perhaps explaining why the Dow Jones futures are looking so flat.
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