Market News & Analysis
FTSE Rebounds Despite Dire Data
Fiona Cincotta April 16, 2020 8:01 AM
Retailers are lagging this morning after the British Retail Consortium laid bare the extent of the impact of the coronavirus lock down on the UK economy. Retail sales fell by 27% in the two weeks following the government-imposed lock down. Sales had jumped 12% in the three weeks prior as households stockpiled. The overall decline in retail sales for March was -4.5% the largest drop since record began in 1995.
Today the UK government is widely expected to extend the lock down by an additional three weeks. However, there is also growing pressure on the government to reveal its exit strategy as the size of the hit to the economy become apparent. This is particularly the case after the OBR warned that the UK could experience its deepest downturn 3 centuries.
Investor sentiment is likely to hinge on US initial jobless claims. Expectations are for 5.1 million more Americans to sign up for unemployment benefit. This would take the four-week total to over 21 million or 13% of the US workforce.
Levels to watch
The FTSE slipped below trend line support in the previous session. Despite a 0.9% jump on today’s open the FTSE remains below this support. A move above this support at 5775 could see more bulls jump in.
A move over the trend line support could see the FTSE attack resistance at 5950 (high 14th April).
Immediate support can be seen at 5525 (overnight low futures) prior to 5350 (low 3rd April).
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