The FTSE has mostly moved higher during the day, gaining ground as US markets broke record ground. The Dow Jones Industrial Average rose to 26,623 as almost all of its 30 component companies traded higher. The S&P 500 also hit a record high while Nasdaq traded 1.7% below its top level. Although there is some froth in the rally it is also a reflection of the overall strong state of the US economy which is currently growing at around 3%. Jobless claims are still declining, the housing market is going strong and the country’s manufacturing continues to expand.
In London, miners were favoured again as metals prices continued to build on recent rallies; the moves higher were also helped by Anglo-Australian heavyweight Rio Tinto announcing plans for a large share buyback.
Brent crude drops after Trump’s anti-OPEC tweet
Crude oil prices seem to have become the next target for US President Trump’s ire as he took a swipe at the oil cartel OPEC. Brent crude lost 0.78% and West Texas Intermediate traded 0.30% lower after Trump tweeted that OPEC needs to keep crude prices lower because of the military protection the US provides for the region. Oil prices have moved higher over the past few weeks because of the looming US sanctions against Iran which will disrupt crude exports from this country but the increase has been capped by rising levels of stocks held in the US. The US is keen to avoid the fallout from Iran sanctions and US representatives have in separate negotiations asked the two largest producers, Saudi Arabia and Russia, to keep production levels up in order to avoid a spike in prices. However, this week Saudi Arabian officials said that they were comfortable with oil prices around $80, slightly above today’s Brent crude price of $78.92. Trump’s tweet is a shot at the cartel ahead of its meeting on Sunday where it will discuss its next production level target.
Pound flat against euro as EU pushes for an October Brexit deal
The pound has perked up to trade 0.78% against the dollar but was barely higher against the euro as European Union leaders pushed for a Brexit deal next month. A summit in Brussels on October 18 is seen as a form of soft deadline for a Brexit deal. EU leaders said that if Prime Minister Theresa May doesn’t provide a better offer on trade and the Irish border they are ready for the talks to fail. Her response was that her Chequers proposals for trade with the EU were the only way forward.
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