FTSE 100 up, gold up ahead of US inflation data

  • FTSE up 49 points
  • Gold continues to climb
  • Miners weigh in on the FTSE 100

Raw sugar futures soared to over US$24.5 a pound in April, the highest level in more than a decade as concerns over tight global supplies surface.

Sugar production in India, the world’s second largest producer, is expected to fall to 33.5 million tonnes this financial year from 34.5 million tonnes, according to the All India Sugar Trade Association.

Rumors are swirling that India may not approve any additional sugar exports during the year until September as well.

Production is also expected to decline in other major producers, mainly Thailand and China, although this is offset by Brazil, the world’s largest grower, which plans to produce 40.3 million tonnes over the next year just started, the second highest amount on record.

The Teucrium Sugar Fund gained 2% yesterday in the US, changing hands at 2.13%.

Associated British Foods, which has a sugar division, was little changed, trading at 1,971p.

10:15 am: De La Rue issues a warning

In some economic news, currency printing company De La Rue saw its shares fall 19% after warning that lower demand for banknotes means adjusted operating profit for the financial year 2023 is expected to be lower. to market expectations.

The Basingstoke, England-based company said earnings were expected to fall short of market expectations by a mid-single digit percentage following a slowdown in its foreign exchange business, with demand for banknotes at its lowest since over 20 years.

Elsewhere, Everyman Media showed there was still life in the movie scene amid Cineworld’s collapse.

The group moved to full-year profit in 2022 and said it remained “confident on another year of solid operational and financial progress”, although shares were little changed.

The FTSE 100 gained 49 points to 7,834.

9:59 a.m.: Job availability is increasing

The availability of job applicants in the UK increased for the first time in more than two years last month, according to a survey of recruiters, while wage increase levels were near the lowest in two years.

The supply of workers in March increased for the first time since February 2021, supported by “modest” increases in the availability of permanent and temporary staff, the KPMG and REC jobs report showed on Wednesday.

A number of recruiters report a relative improvement in job seeker confidence, although the supply of staff has also been increased by recent layoffs.

As availability has improved, economic uncertainty has caused companies to lay off and often opt for temporary rather than permanent hires, making it a month-long ‘cure egg’, said Claire Warnes , partner of KPMG UK.

“Over the past few weeks we’ve seen a bit more confidence among employers, and that’s reflected in this latest data,” said Neil Carberry, chief executive of REC, pointing to the “significant” easing in the contraction of the permanent job market. in March.

“After six months of slowing activity since peaking last summer, the market is now better described as stable than declining. This is the mark of a better-than-expected economy at the end of last year,” Carberry added.

The British pound remains stable against the US dollar, currently at US$1.24175.

9:48 am: the CAC 40 reaches a record

In Europe, France’s benchmark CAC 40 extended gains for the third straight day, up 0.41%, to trade at record highs of 7,421, ignoring the riots and strikes currently engulfing the French companies.

In Germany, the DAX was up 0.34% at 15,711 while Spain’s IBEX 35 led the way for major European indices, up 0.86% at 9,315.

London’s premier index, the FTSE 100, was up 06%, or 46 points, at 7,832.

9.25am: UK supermarkets still battling inflation

Away from some of the US-focused updates, Citi Group said UK supermarkets are still struggling with record inflation.

The bank’s analysts held an in-depth analysis of trends in UK aisles with Kantar and found a four-week inflation of 17.5% was a record high, despite a weaker monthly advance.

Discounters including Aldi and Lidl continue to boost inflation figures, followed by Asda and Morrison.

Sainsbury’s has the lowest inflation and volume losses among supermarkets.

German companies Aldi and Lidl continue to benefit from falling customers, although “earnings have started to decline”.

Supermarkets say they are still struggling with record inflation, which is being passed on to consumers, although the costs of raw materials, such as wheat, coffee and sunflower oil, have all fallen over the year last.

Sainsbury’s shares fell 0.3% to 278p, while they slipped 0.15% to 267p.

Marks and Spencer was flat, changing hands at 165p.

The FTSE 100 gained 45 points, 0.59%, to 7830.

9:03 am: the FTSE 100 strengthens

The FTSE 100 continues to rise in the first hour of trading, rising for the fourth consecutive session, gaining 34 points to 7,821.

The broader FTSE 250 index remains stable, down 4 points to 18,962.

Energy companies Shell, Centrica and SSE linger towards the top of the index, with crude oil trading slightly higher at US$81.67 a barrel, Brent oil and natural gas both flat.

Miners continued to pull the index higher, with steel rebar futures falling below CNY 4,000 a tonne, the lowest level since Jan. 5, amid weak demand during the peak construction season in China.

Anglo-American, Fresnillo, Rio Tinto and Endeavor Mining all continued to trade in negative territory.

With a dearth of financial news forecast for the UK today, all eyes are on economic data from across the pond.

Core inflation, which is inflation related to all commodities except food and fuel prices, is expected to remain stable at 5.5%.

Headline inflation, which includes volatility in food and fuel prices, is expected to fall to 5.3% from 6%, according to Trade Economics.

British investors, analysts said, continued to remain cautious ahead of US data, which could easily set the tone for the Bank of England’s monetary policy.

Market uncertainty is clearly working in favor of safe-haven assets, with gold rising 10% in the past day to US$2,013 an ounce.

8:38 am: IMF updates UK forecast

The International Monetary Fund (IMF) has raised its forecast for Britain’s economy this year and next, but still expects it to grow more slowly than other Group of Seven (G7) countries.

UK output is expected to contract 0.3% this year before rebounding to grow 1% next year, economists working for the Washington-based think tank said.

This puts the UK firmly at the bottom of the G7 group of advanced economies this year. The only other economy the IMF expects to decline is Germany, which is expected to contract by 0.1%.

But it was an improvement on a previous IMF forecast, which predicted the UK economy would contract by 0.6% this year.

“Notably, emerging and developing market economies are already making progress in many cases, with growth rates (Q4 to Q4) rising from 2.8% in 2022 to 4.5% this year,” a- he declared.

“The slowdown is concentrated in advanced economies, particularly the Eurozone and the UK.”

Next year, the UK will return to growth, according to the IMF. Production is expected to rise by 1%, again putting the UK at the bottom of the G7, tied with Japan and slightly ahead of Italy, which is expected to grow by 0.8%.

Economists have also warned of further problems in the coming months, even after recent chaos in the banking sector which saw several US banks fail and Credit Suisse taken over by rival UBS.

“However, below the surface turbulence is building and the situation is quite fragile, as the recent crisis of banking instability has reminded us,” the IMF said.

“Inflation is much more rigid than expected just a few months ago. While global inflation has declined, this mainly reflects the sharp reversal in energy and food prices.

“But core inflation, excluding the volatile energy and food components, has yet to peak in many countries.”

In the UK, inflation is expected to fall from 9.1% last year to 6.8% this year and 3% in 2024.

The FTSE 100 gained 20 points to 7,806.

8:27 a.m.: FTSE 100 opens higher

The FTSE 100 opened higher, gaining 21 points to 7,807 and defying pre-market expectations that the blue-chip London index would open one point lower.

Frasers Group took the lead at the top of the index, climbing 1.15% after yesterday’s figures from the British Retail Consortium showed retail sales in March were up 4.9% from 12 months earlier.

Analysts also suggested that fewer people expect to tighten their purse strings, leading investors to flock to retail assets.

Burberry gained 0.72% while shares of Next rose 0.4%.

Mining stocks, however, weighed on the FTSE 100, with Endeavour, Fresnillo and Anglo-American all in negative territory, down 0.8%, 0.79% and 0.72% respectively.

8:00 a.m.: Gold continues to climb

Gold continues to soar as investors seek safe-haven assets amid market turmoil, with all eyes on key US data today, including the underlying inflation rate and the FOMC minutes.

The precious metal has rebounded more than 12% in the past 24 hours to hit US$2,015.76 an ounce, albeit below last week’s all-time high of US$2,034.

Elsewhere, Bitcoin, often referred to as digital gold, fell slightly from yesterday’s price of US$30,000, the cryptocurrency’s highest level since June last year.

“Investors are keen to see more evidence that hot prices are running out of steam, but are still worried that later CPI numbers will indicate the cooling process is proving to be slow,” said currency chief Susannah Streeter. and markets at Hargreaves Lansdown.

7:04 am: FTSE will open little change

The FTSE 100 is expected to open little changed as investors eagerly await the US CPI printout and the minutes of the latest FOMC meeting for clues on the Federal Reserve’s next move.

Spread betting companies call the London lead index one point.

US stocks ended mixed on Tuesday, with the Dow Jones Industrial Average closing up 98.27 points at 33,684.79, the S&P 500 flat at 4,108.94, while the Nasdaq Composite slipped 52.48 points to 12,031.88.

In Asia on Wednesday, the Nikkei 225 index was up 0.6%, In China, the Shanghai Composite was up 0.2%, but the Hang Seng in Hong Kong was down 0.8%.

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