FTSE 100 hits new high
Boom!
Britain’s leading index has hit a new peak, touching 7598.99 and within a whisker of 7600. The weaker pound – down 0.17% at $1.2858 – is helping, but the signs of a buoyant global economy – in particular the US – is also providing support.
The FTSE 250 is also at a new record, reaching 20,071. Meanwhile the US futures are predicting a 73 point opening on the Dow Jones Industrial Average, which could also see it in unprecedented territory. Connor Campbell, financial analyst at Spreadex, said:
The markets are looking pretty buoyant this morning, boosted by the prospect of this afternoon’s non-farm jobs report.
The FTSE appears to be gunning for a new record this Friday, surging more than half a percent after the bell to sit just a handful of points below 7600. As for the pound, with no new polls – yet – to cause it to panic it got off to a rather dull start, dipping 0.1% to 0.2% against both the dollar and the euro. Sterling has tended to do better in the afternoon than the morning this week, once the early political news has been fully digested. Today, however, sees the latest US jobs report, and with the Fed looking to raise rates this month a strong non-farm figure could cause cable’s initial losses to widen.
The Eurozone was just as jubilant this Friday, with the DAX and CAC both rising around 1%. That’s pushed the German index back to 12800, and within 50 or so points of a new all-time high, while the CAC is at its best price for a week and a half. There isn’t actually much for the Eurozone to work with this morning, the indices seemingly surging on the prospect of a 21200-crossing open for the Dow Jones later today.
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European markets open higher
Boosted by the gains on Wall Street and in Asia, European markets have made a good start to the day.
The FTSE 100 is currently up around 0.4% at 7580, within 6 points of the record high achieved earlier this week.
Meanwhile France’s Cac has climbed 0.6%, Germany’s Dax 0.7%, Italy’s FTSE MIB has risen 0.48% and the Euro Stoxx index is 0.2% better.
And the world stocks index has also hit a new high:
Holger Zschaepitz
(@Schuldensuehner)World stocks measured by MSCI All World Index hit a fresh record high as upbeat data boosts confidence. https://t.co/APNNlD9Jgj pic.twitter.com/0BIiIDhmCn
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Markets appear to be shrugging off the controversial decision by Donald Trump to pull the US out of the Paris climate agreement, instead concentrating on the forthcoming US jobs figures. Jasper Lawler, senior market analyst at London Capital Group, said:
As global leaders decried Donald Trump’s decision to withdraw the US from the Paris Climate Accord, investors were quietly pumping funds into the stock market. Dumping the climate deal hasn’t really hurt of hindered investor’s appetite for risk…
Surprisingly good private payrolls data has increased confidence in the US economy ahead of today’s jobs report. The Fed looks set to raise rate this month irrespective of recent data, so investors are glad to see an economy that can withstand it. Expectations are for 185k US jobs to have been created in May, down slightly from the 211k in April with earnings growth of 0.2% m/m.
In Asia, Japan’s Nikkei index breached 20k for first time since 2015, matching similar gains in Hong Kong and Australia.
European investors look to be taking heart from optimism in Asia and the strong finish on Wall Street with all the major indices set for a higher open.
It’s a little quiet on the corporate and economic calendar so it may end up being a wait-and-see type day before the US jobs report.
Our live blog on the fallout from Trump’s climate decision can be found here:
Agenda: US jobs data and UK construction in focus
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s a big day for the US economy with the latest monthly jobs and wages figures due later. Analysts are expecting another bumper outcome after April’s better than expected number, which would probably put the seal on a US rate rise this month.
Originally, forecasts were for an increase of around 180,000 in non-farm payroll jobs. But with Thursday’s forecast-beating private sector job numbers from payroll specialist ADP, that could easily prove conservative.
The jobs data helped push US markets sharply higher, with both the S&P 500 and Nasdaq Composite hitting new peaks. Meanwhile in Asia, the Nikkei 225 added 1.6%, closing above 20,000 for the first time since 2015.
Europe is also forecast to make a strong start, with the FTSE 100 on track for a new intra-day peak:
IGSquawk
(@IGSquawk)Our European opening calls:$FTSE 7593 +0.65%
$DAX 12740 +0.59%
$CAC 5352 +0.63%$IBEX 10963 +0.75%$MIB 21091 +0.74%
Michael Hewson, chief market analyst at CMC Markets UK, said:
European markets look set for a strong open this morning having started on the front foot yesterday, helped by a continuation of the recent theme of an improving economic environment, as further improvements in economic data fuelled a positive start to the month, which was carried on in the US, after Europe had closed.
This rise in US markets saw yet more record closes across the board, after a singularly upbeat ADP payrolls report showed that the US economy added 253k jobs in May, well above expectations of 177k. This bumper number more or less confirmed the prospect of a June rate rise, with the potential for further moves later in the year, maybe in September, if the economy holds up. Yesterday’s number also raises the bar for today’s official payrolls report which is expected to come in at around the 180k level, down from 211k in April.
This seems rather conservative given the decent ADP number, and the fairly close correlation between the two we’ve seen over the last few months, the March outlier notwithstanding. This would suggest that a number in excess of 200k for non-farm payrolls would be more in line with expectations…
Today’s average hourly earnings data for May is [also] likely to be closely scrutinised with a modest increase from 2.5% to 2.6% expected.
Before all that, come UK construction figures. In April the construction PMI was lifted by civil engineering and housebuilding and came in at 53.1. This time round it is expected to slip to around 52.7, but this is still a reasonable performance following Thursday’s positive manufacturing figures.
Here’s the agenda (all times BST):
9.30: Markit/CIPS UK construction PMI
10.00: Eurozone producer prices index
13.30: US non-farm payrolls data
We’ll be tracking all the main events throughout the day.
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