The FTSE 100 closed above 8000, a new all time high and we should be full of cheer but, sadly, it is the 'Cheap Britain' story with Cable at 1.2340 that are making stocks look undervalued. Interest rates in the UK are still on a downward trajectory whilst in the US the Fed is pausing, but why? Look no further than commodity markets - Coffee +35.5% YTD, Cocoa +183.4% YTD, Copper +14.8% YTD, Aluminium +12.8% YTD and Bitcoin up 61.8% YTD, the inflation story is not over.
Back to today and we have PMI figures for France, Germany, the UK and the US, having already seen upside movement in Australia, 49.9 manufacturing vs. 47.3 last month, 54.2 in services vs. 54.4 and in Japan - 59.9 in manufacturing vs. 48.2, 54.6 in services vs 54.1. Will that strength continue? In the US we have new home sales, the Philly Fed services survey, and the Richmond Fed manufacturing index. On the speaking front we have Central bank speeches from Haskel and Pill at the BOE, and Panetta and Nagel from the ECB. On the earnings front we hear from Tesla and PepsiCo.
Market wise the “de-escalation” story is slowly filtrating through, Spot gold fell 1% to $2,303.82 an ounce, West Texas Intermediate crude was flat at $82.24 a barrel, Bitcoin was little changed at $66,532.2 and the yield on 10-year Treasuries was little changed at 4.61%. Domestically it is the coldest April since 1997 but at least the stock markets are hot - but for how long?
