After a steady trading in the US over night and a rebound Asia, the marker board was a sea of positivity this morning. The FTSE is seen push higher in early trade, along with European bourses and US futures. There is certainly a calmer feeling on the trading floor on Thursday, after three intense sessions, investors are pausing, waiting for more information.
US traders await more detail on the tax reform
The US saw investors take a more measured approach to trading than in recent session, as they wait for more details as to how the US tax reform will look after the reconciliation process. Whilst both the Senate and the House have approved separate tax reform bills, these are now being reconciled, before the houses will vote on the new bill and send it off to Trump for signing. This process should be complete before Christmas.
The US session also saw tech stocks return to favour after being dumped by investors earlier in the week. Whilst there has been no further information as to how this sector may be impacted by the tax reform, investors were seeing the sell off as being overdone.
FTSE riser fallers
On the FTSE, Whitbred is enjoying another strong session, as rumours of a break-up continue to circulate. Meanwhile Hammerson was being punished by investors for a second day over its offer to buy Intu.
Sterling steadies despite no Brexit breakthrough
The FTSE was also receiving a boost from a weaker pound, although even the selloff in the pound appears to have steadied somewhat. Whilst there is still no solution to the Irish border solution and Theresa May’s political futures is once again looking dubious. The UK Prime Minister is preparing another offer to Ireland, over the border dispute. Should this not be well received then any remaining optimism could be quickly wiped out. The pound is down 0.1% versus the dollar, but is having trouble rebounding off the key support at $1.3360.
A lack of high impact UK economic data will see Brexit headlines continue to drive pound price action.
Europe stronger as GDP moves into focus
European bourses also jumped out the blocks on the front foot. The Dax is trading comfortably above 13,000 after a sell off in the previous session. Meanwhile the euro is also moving northwards as investors anticipate another strong GDP reading later this morning.
Economic growth in the eurozone is expected remain steady at a solid 2.5%. No downside surprise is expected given that the data flowing from the Eurozone continues to paint a picture of a broad based, robust economy.
Bitcoin above $14,000
The rise of the bitcoin appears to be unstoppable. Bitcoin bulls have driven the virtual currency beyond $14,500 for the first time. Bitcoin has jumped 20% over the last 24 hours with buyers of the virtual currency now eyeing up $20,000. Given the fact that both the CBOE and the CME exchanges will begin offering bitcoin futures this month, perhaps the prediction of $20,000 is not that far off? However, the start of futures trading also means the start of short trades on the bitcoin, which could increase volatility further.