(MENAFN- ProactiveInvestors - UK) Accendo Markets , 08:16
Henry Croft, Research Analyst at Accendo Markets commented to clients this morning:
'FTSE 100 Index called to open -15pts at 7000 after yesterday's particularly volatile trading session, highlighted by a GBP depreciation resulting in a brief stock market spike, with the index ultimately closing posting minor gains. Bulls will be hoping that a bounce at 10 day rising support early this morning will see a rally towards and subsequent challenge at 7040 resistance , while the Bulls will be hoping that the FTSE turns back and breaks through that rising support at 6995 on the path to 6930. Watch levels: Bullish 7045, Bearish 6975.
A negative opening call follows weak overnight trading in Asia and a slide in Crude Oil prices after an industry report showed a larger than expected inventory build yesterday evening. The fallout from FTSE 100 earnings releases is likely to sway markets this morning, with Lloyds (missing profit expectations by 6% despite CEO stating no Brexit impact on consumers), Antofagasta, British American Tobacco, Bunzl, GSK and Standard life all reporting today. Also keep an eye on GBP FX markets today following yesterday's sharp depreciation; with a noticeable motive yet to be found, underlying concerns over future performance of Sterling continue to build, commentators suggesting that a lack of natural buyers is likely to see the Pound fall further.
Asian equities are in the red, Australia's ASX index leading the way with losses of 1.5% led by the heavily weighted Financial and Energy sectors. Japan's Nikkei is also down 0.2% while the Hang Seng index in Hong Kong is also trading lower by half a percent.
US equity markets closed lower yesterday with market sentiment weighed on by a wave of underwhelming Q3 earnings releases. Dow Jones Futures closed down 0.3% as Caterpillar and 3M reported mixed earnings before the bell, while world's most valuable company Apple reported a third straight quarterly revenue decline citing falling sales volumes as a driver after market close.
Crude oil prices suffered a breakdown of support overnight, falling over 1% yesterday as American Petroleum Institute figures showed a build in inventories almost three times greater than expected. The significant build of 4.8m barrels against predictions of 1.7m sees Brent Crude hover close to the $50 per barrel mark for the first time since late September. Weakness in prices come as concerns grow over the plausibility of a production freeze deal being reached by OPEC producers and non-OPEC Russia in a month's time. Watch official Department of Energy EIA Inventory figures this afternoon for a possible confirmation of last night's API data.
Gold price continues to increase overnight as Indian led demand offsets the impact of a strengthening US Dollar. Market analysts suggest that investors have already priced in a US Fed rate hike before 2016-end, although strong US macro data this afternoon could curtail the rally.
In focus this morning will be the continued fallout from the Lloyds Q3 earnings data, showing a miss on profit expectations and a growing bill for PPI repayments, now topping the list of UK banks that have paid out to consumers.
Away from earnings, this morning's macro data sees French Consumer Confidence for October, expected to marginally increase, after which UK BBA Loans for House Purchase data for September is released, predicted to show a slight increase from the previous month. At midday, US MBA Mortgage Applications are reported, while Advance Goods Trade Balance and Wholesale Inventories for September are announced at 1:30pm. US Service PMI figures for October are reported at 2:45, with a surprise uptick similar to Monday's Manufacturing PMI data adding further traction to December Fed rate hike expectations. Finally, US New Home Sales are seen declining slightly over the month of September at 3pm with weekly DOE EIA Crude Oil Inventories rounding off the day, with investors looking to see if the figures echo last night's API inventory data that showed a build three times greater than expected.
On a light day for speeches we hear from the ECB's Hansson at 9am before Canadian Prime Minister Justin Trudeau speaks at 11am, with European focused investors hoping for an update on the position of the EU-Canada (Ceta) trade deal. Watch Euro FX markets for any subsequent movement.'
Accendo Markets
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