The FTSE leads the way again this morning with another small rise solidifying the risk on sentiment taking hold in London. The market is up 0.25 per cent this morning although things are a little weaker on the mainland with the Cac down nearly 0.1 per cent and shares in Frankfurt falling 0.26 per cent. New retail inflation figures also show signs of deflation in the UK.
HSBC is leading the FTSE higher after a good earnings update but also news that chief executive Noel Quinn will retire later this year. The Hang Seng continued its run albeit more teppidly on Tuesday compared with yesterday, rising just 0.1 per cent. This was after the Bank of China dragged the average down after its underwhelming results. In New York the S&P 500 and Dow both rose around 0.3 per cent.
Japan, surprisingly, led the the gains in Asia overnight as the yen fell again yesterday. There is of course a historic correlation between a weaker yen and a rising Topix given the market’s reliance on exporters, but the currency issues are a bit more serious this time around. That being said, Mitsubishi Electric rose 15 per cent. We’re still on hold for government intervention for the yen, with ¥160 to the dollar seen as the trigger point, and the it currnetly trading just slightly under.
It’s a busy day for both FTSE 100 companies and economic updates, with news France’s economy growing 0.2 per cent in the first quarter, ahead of expectations, with economists suggesting it bodes well for the rest of the bloc. The eurozone’s overall inflation report will come later today, with all eyes on that and what it means for the European Central Bank’s plan to cut rates in June. Spain’s economy also grew more than expected with first quarter GDP coming in at 0.7 per cent, above the predicted 0.4 per cent. Alongside HSBC, St James’s Place, Hargreaves Lansdown and Whitbread also have important news, more on that here.
The latest figures from the British Retail Consortium showed food inflation fell to 3.4 per cent from 3.7 per cent, while shop price inflation is down to 0.8 per cent. But the big thing was non-food items are now delfationary with prices falling 0.6 per cent in April. The three-month average is now 0.2 per cent, the lowest since late 2021. However, the BRC’s Helen Dickinson says consumers shouldn’t get too happy about it as commodities and geopolitics could soon push up prices soon, although you’d imagine the Bank of England will look at the latest release with interest.
The Trader is written by Taha Lokhandwala
