Morning Markets: FTSE100's 2017 gains wiped out
- US: Initial Jobless Claims (1230 GMT)
- US: Philadelphia Fed Manufacturing Index (1230 GMT)
It's not always easy to predict when a market-moving event will turn out to actually be market moving. Witness the relative ease with which global indices took last week's geopolitical escalation over Syria and North Korea in their stride.
But the announcement of a UK election is seemingly a different matter. FTSE100 bulls are definitely counting the cost of Theresa May's snap call as the multinational dominated index saw all its gains for the year wiped out. Sterling's rise to $1.28 plus has been the index's loss with many of the listed earning in foreign currencies, and with GBPUSD slated to go higher Thursday set against a backdrop of general dollar weaklness, there is every likelihood that the index will plunge further.
The FTSE100 closed at 7,114 Wednesday and dipped briefly below 7,100 to put the key psychological barrier of 7,000 in the frame. The FTSE250, which is made up of more domestic companies with earnings in sterling, rebounded to 19,417.76.
In general, there was a tepid recovery in equities through the Asian session with Nikkei dipping into red territory in the hour before the European open and Hang Seng up 0.3%. The Shanghai Composite Index was also running counter to the slight-recovery theme, down some 0.5% at 0622 GMT although a late run of money into the index before 0700 GMT brought it back virtually to flat.
Markets continue to be spooked by a general air of unease. While we are not exactly in a safe-haven flight environment, US 10-year Treasuries yields are back at 2.2%, gold is holding its ground at the $1,280/oz mark and USDJPY remains entrenched in a 108.50-109.0 zone.
The gradual dawning on markets that the Trump trade is probably not going to see the light of day for some time if ever, allied to Marine Le Pen's ever-more shrill outbursts as we head into France's first round of the presidential election Sunday are blending with the underlying geopolitical fears to keep the mood watchful and fearful.
2016 may have been the year of cataclysmic change. But with the election spree ahead in Europe and a realignment of international alliances, the shockwaves are running through 2017.
- Crude oil recouped some losses after falling nearly 4% to a two-week low
- Asian equities headed into positive territory
- Japan's exports were up 12% in March, their fastest pace in more than two years
- The Nikkei 225 headed higher on growth optimism up 0.37% to 18,499.57 at 0424 GMT
- The Shanghai Composite clawed its way higher up 0.05% to 3,172.36 at 0516 GMT
- The Hang Seng rebounded from a losing streak up 0.46% to 23,936.08 at 0518 GMT
- Korea's Kospi Composite was up 0.42% to 2,147.44 at 0500 GMT
- New Zealand's inflation reached 2.2% in the year to the March quarter
- The S&P/ASX200 clawed back some recent losses, up 0.23% to 5,817.20 at 0519 GMT
- Iron ore prices have stopped tumbling, bringing some respite to Aussie mining shares
- Remaining members of the Trans Pacific Partnership pact meet in May, without the US
- Investors are focused on the first round of the French elections this weekend
- The USD edged higher against the yen; it was worth ¥108.9410 at 0521 GMT
- The Australian dollar gained a little ground; it was worth 0.7505 at 0521 GMT
- The Turkish lira edged higher against the US dollar; USD was worth 3.6690 at 0522 GMT
From the Floor
French centrism. "Macron would represent a quiet revolution in France," says Hardy.
Oil's plunge. "A lot of risk premium came out of the market Wednesday in one go," says Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
The weekly jobless claims report for the US will be closely read for economic clues ahead of next week's "advance" GDP data for the first quarter, writes James Picerno.
The Reserve Bank of New Zealand's dovish position that no policy response is required because inflation will be “variable” this year due to one-off effects is being tested, explains Max McKegg.
The GBPUSD rally following Theresa May's snap election announcement is undeniably impressive, but it owes a lot to short covering, says John J Hardy.
If the vote in France on Sunday ends up pitting Marine le Pen against Francois Fillon, it will be the worst possible outcome for markets, says Christopher Dembik.
The four-way fight to get into the second-round run-off for the presidency in France is giving markets the jitters and forcing bond yields ever lower, writes Michael Boye.
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