London’s FTSE 100 was down a tad on Monday morning, with trade lacking in inspiration as investors moved with caution ahead of a US inflation print on Wednesday.
The FTSE 100 index opened down 9.32 points, 0.1%, at 7,901.84. The FTSE 250 was down just 0.09 of a point at 19,725.85, while the AIM All-Share added 2.43 points, 0.3%, at 742.48.
The Cboe UK 100 declined slightly to 789.88, the Cboe UK 250 was flat at 17,147.25, while the Cboe Small Companies was down 0.1% at 14,665.47.
The CAC 40 in Paris and Frankfurt’s DAX 40 each added 0.3%.
In Tokyo on Monday, the Nikkei 225 closed up 0.9%. The Shanghai Composite fell 0.7%, while the Hang Seng in Hong Kong was down 0.1% in late trade. The S&P/ASX 200 in Sydney added 0.2%.
In New York on Friday, the Dow Jones Industrial Average rose 0.8%, the S&P 500 added 1.1% and the Nasdaq Composite surged 1.2%.
The gains came on the back of a robust US jobs report. According to the Bureau of Labor Statistics, nonfarm payroll employment rose by 303,000 in March, higher than the FXStreet-cited consensus of 200,000.
The figure for February was revised down by 5,000, from 275,000 to 270,000 while January’s total was adjusted upwards by 27,000, from 229,000 to 256,000. This means employment in January and February combined was 22,000 higher than previously reported.
Focus this week turns to a US inflation reading. Data on Wednesday is expected to show that the rate of US annual consumer price inflation picked up to 3.4% last month, from 3.2% in February, according to FXStreet cited consensus.
The pound was quoted at $1.2626 early Monday, rising from $1.2621 at the time of the London equities close on Friday. The euro was flat at $1.0830 against $1.0831. Against the yen, the dollar climbed to JP¥151.84 from JP¥151.54.
Analysts at Dutch bank ING said the ‘dollar should be doing better’.
‘It is a little surprising to see EUR/USD trading above 1.08 despite a strong US jobs report for March. Could investors be waiting for Wednesday’s release of the March US CPI data before taking the dollar on another leg higher? For the week ahead, the US CPI number will dominate,’ ING added.
‘Currently, the market prices just 62bp of Fed easing this year, and a terminal rate for this easing cycle at 3.65%. The risks are clearly skewed to the market just pricing 50bp of Fed easing this year, pointing to the dollar staying stronger for longer.’
The European Central Bank announces its latest interest rate decision on Thursday. It is expected to leave rates unmoved, but focus will be on any clues on rate cut timing.
Deutsche Bank analysts commented: ‘The big question is likely to be what they signal about the subsequent meeting in June, which investors are pricing in as a very strong probability for an initial rate cut. Indeed, we found out last week that Euro Area core inflation fell to a two-year low in March of 2.9%, and the account of the last ECB meeting said that ’the case for considering rate cuts was strengthening’.
‘Our European economists think that the ECB needs additional data over the next couple of months to underpin its confidence in price stability and open the door for a June rate cut. But they think it should be clear that a June cut is the working assumption, barring a significant shock.’
In London, Entain shares shot up 3.4%, after The Sunday Times reported the Ladbrokes owner is considering its options for a number of assets amid a strategic probe.
The newspaper, citing sources, also reported that Entain could name its next chief executive at ‘any time in the coming days and weeks’.
The bookmaker has called on investment bank Moelis to help with a review of its brands. It also owns Coral, Sportingbet and Bwin. The future of ‘a whole range’ of assets are under consideration, The Sunday Times reported, citing sources.
The Sunday Times reported that a number of buyout firms, including the likes of Apollo Global Management and CVC Capital Partners, are watching on with interest. The latter already has a hand in the gambling market, as it owns German bookmaker Tipico.
Also on the up, Fresnillo climbed 0.7%, tracking the gold price higher.
Gold was quoted at $2,335.01 an ounce early Monday, rising from $2,325.89 at the London equities close on Friday.
Exness analyst Wael Makarem said bullion could see some weakness ahead, however.
‘Gold prices remained on an uptrend overall but could see some correction risks as monetary policy expectations continue to change. Traders continued to monitor US economic data as well as the comments from the Federal Reserve governors. Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank will require more evidence of inflation moving sustainably towards the 2% target before considering interest rate cuts,’ Makarem said.
Back in London, Cake Box shares added 6.0% as the company predicted annual profit ‘slightly ahead of market expectations’.
The cake maker hailed ‘further growth’ in the second half of its year ended March 31. It expects yearly revenue to rise around 9.0% from £34.8 million.
‘The group continues to balance cost control whilst investing in its growth areas. We have benefited from the continued stabilisation in the cost of raw materials during the year and have seen further efficiency benefits from previous investment in the business. Consequently, this combined with the increase in revenues means the group expects to report adjusted profits slightly ahead of market expectations,’ Cake Box said.
Also on the rise, shares in European Green Transition fetched at 10.68 pence shortly after its AIM debut, a rise of 6.8% from its initial public offering price.
The company, which intends to invest in a portfolio of green economy assets in Europe, had a market capitalisation of £14.5 million on admission. It raised £6.5 million at a price of 10 pence per share.
Chief Executive Officer Aiden Lavelle said: ‘Today’s listing and fundraise is a crucial milestone for EGT. The funds raised will contribute to our existing green economy projects which are intended to support the energy transition across Europe, notably the Olserum rare earth project in Sweden. Additionally, the fundraise will strengthen the company’s position to acquire what we believe are distressed and undervalued green economy assets in Europe.’
A barrel of Brent oil fetched $89.87 early Monday, down markedly from $91.31 late Friday.
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