- London shares in demand in early trade with oil producers to the fore
- Will central banks slow their tightening?
- Energy prices likely to remain elevated for substantial time
London stocks leapt out of the blocks this morning with the FTSE100 putting on 1 per cent in early trading after a positive end to the week in New York last week. Elsewhere, the DAX was up by a more modest 0.2 per cent and Paris’ CAC40 was 0.8 per cent to the good. German enthusiasm is possibly tempered by the fact that Europe’s engine room appears to be spluttering - the country posted its first monthly trade deficit since 1991 for the month of May.
Once again the debate appears to have opened up over just how far central banks can go in their tightening cycles as rising interest rates threaten to choke off economic growth in the face of soaring inflation. This was a question our new economics writer Hermione Taylor posed in her column last week on whether banks can find their ‘goldilocks’ moment.
The latest glimmer of hope for equity traders came in news on Friday that US manufacturing activity slowed sharply in June, possibly presaging a foot off the pedal moment from the Federal Reserve later this year. The S&P500 put on 1 per cent on Friday in response.
On the London market oil producers continue to catch a bid as oil prices remain elevated - a problem highlighted by a series of coordinated protests about petrol prices across several major arterial roads today. With oil remaining stubbornly high, and little prospect incoming of relief it could be a long summer of discontent. Elsewhere in the commodities complex some metals prices are declining along with economic activity but in areas like the copper market the long term fundamentals remain in place - as Mark Robinson writes.
Meanwhile, the pain felt by consumers through higher gas, and power, prices is unlikely to be relieved shortly either as worries are growing that Europe could face a power crunch this winter without Russian supplies. More from Alex Hamer here.
