British Shares Set to Extend Gains for 3rd Day
Contracts on the FTSE 100 futures were in the green on Friday, tracking its European peers higher, as investors await the results of local elections for the Scottish Parliament and Welsh Senedd and mayors and local councils in England. Meanwhile, traders digest upbeat trade data from China while awaiting the US non-farm payrolls report. The FTSE 100 is set to shoot through the 7100 barrier today for the first time since February last year, extending gains for the 3rd consecutive session amid strong first-quarter earnings season and as the Bank of England raised growth forecasts.
Sterling Steady at $1.39
The British pound held steady at $1.39 on Friday, after the Bank of England kept its monetary policy unchanged, but announced a slowdown in the pace of purchases of British government bonds to £3.4 billion per week, from £4.4 billion previously, signaling it is on course to end emergency support later this year. The Bank raised its estimate for UK GDP growth to 7.25% in 2021, up from a previous forecast of 5%, as easing restrictions on economic activity and the country’s fast rollout of COVID-19 vaccinations support a faster-than-expected recovery from the pandemic crisis. On the political front, Prime Minister Boris Johnson’s ruling UK Conservatives won a crushing victory in the parliamentary district of Hartlepool.
Oil Prices Rise on Upbeat US, China Data
Oil prices rose on Friday after falling by 1% in the prior session, buoyed by upbeat economic data from the US and China. Official reading showed the number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first time since the COVID-19 pandemic struck. Meantime, export growth in China accelerated in April while services activity grew the most in four months. Adding the bullish tone was easing restrictions on movement in the US and Europe, and smooth vaccination campaigns. In India, however, Friday saw a record daily rise in virus cases of 414,188, taking the total caseloads to 21.49 million. On the supply side, OPEC+ started this month a gradual easing of oil production curbs after introducing deep cuts since a pandemic-induced oil price collapse in 2020. At around 06:30 AM GMT, WTI crude and Brent oil rose 0.6%, each, to $65.08 a barrel and $68.49 a barrel. Both benchmarks are on track for the second weekly gains.
Japanese Shares Gain 1.16% Weekly
The Nikkei 225 added 26.45 points or 0.09% to 29357.82 on Friday, lifting 1.16% for the week as investors remained optimistic on prospects of a global recovery following better than expected US data in recent weeks. Local 10-year bond yields were at 0.091%, while US 10-year rates were at 1.571%. On the coronavirus front, the Japanese government plans to expand the ongoing COVID-19 state of emergency and extend it to the end of May in a bid to bring down infections and ease the strain on hospitals. Tokyo Gov. Yuriko Koike noted that the situation in the capital has not improved enough to lift the state of emergency, voicing concern over the spread of highly contagious variants of the coronavirus. In local data, the au Jibun Bank Japan Services PMI was revised higher to 49.5 in April, the 15th straight month of contraction but the weakest pace in the sequence. Investors will be looking ahead to the US nonfarm payroll count for April due later in the session.