- Ironically, optimism over Brexit continues to weigh on the FTSE due to its large exposure to FX and sterling keeps rising.
- The top flight index in the UK fell almost 1% to close at 6,842.88 (-0.85%). However, ongoing concerns over the Sino/US trade tensions is also impacting multinationals, particularly in the UK manufacturing sector which continues to weigh on risk sentiment.
Cable rallied to as high as 1.30652 and by 0.58% versus the single currency to 1.1468 as the market banks on a no deal Brexit being avoided by 29th March. The prospects of the BoE trade coming back into play once the Brexit dust settles, one way or the other, is fueling a bid in what markets perceive as an undervalued sterling, while, recent developments by cross-party efforts are set to back a amendments designed to eliminate the prospect of a no-deal Brexit when MPs come together on the 29th of this month once again to vote on the same. Meanwhile, the Labour party is seeking to force a general election or at least, a second referendum.
Staying with the domestic front, UK the Confederation of British Industry data for the UK’s manufacturing sector came in as the worst since the Brexit vote with the monthly gauge of industrial orders dropping to -1 in January, well below +8 in December and the expectations for a reading of +5.
Best and worst
As for corporate news, EasyJet (EZJ) 1,280.00p 3.69%, was leading the gainers, following JPMorgan and Berenberg’s hiked price targets on the stock. Burberry Group (BRBY) 1,828.00p 2.93% came in as the second-best performer, followed by International Consolidated Airlines Group SA (CDI) (IAG) 631.40p 1.97%. Smith (DS) (SMDS) 317.30p -5.42% lead the worst of the pack followed by Reckitt Benckiser Group (RB.) 5,788.00p -4.00% and NMC Health (NMC) 2,700.00p -3.91%.
FTSE levels
The latest price action has been opening a test of the 21-D SMA after breaking below the 50-D SMA and the 23.6% retracement fibo of the late May 2018 decline targeting 6797 fractal 16th Jan swing low. However, there is a series of supportive lows around this Fibo and S1 located at 6811.
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