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The Krips Report | FTSE US & UK Focus

By February 16, 2017 No Comments

The FTSE 100 closed in the green on Friday, led by banking shares following reports US President Donald Trump is seeking to repeal the 2010 Dodd-Frank law.
The London index ended up 0.67% to 7,188.30 points.

Banking stocks jumped on the FTSE, with Barclays the top riser, as Trump is reportedly looking to scale back the Dodd-Frank regulatory framework, put in place following the 2008 financial crisis. In an interview with The Wall Street Journal, Trump’s Economic Council director Gary Cohn, who is a former executive of Goldman Sachs, said the government is looking to relieve banks of costly regulations.

“Barclays CEO Jes Staley may well be giving himself a pat on the back after announcing a US-UK focus last year. The old Lehman Brothers assets bought up by Barclays Capital will be clear winners from deregulation in the US.”

Energy shares powered ahead as crude oil prices rose after the US launched a fresh round of sanctions against Iran following its ballistic missile test.

Gold capped a week of steady gains with a further $3 rise to $1,218 an ounce, near a two week high.

Meanwhile, the pound fell 0.22% against the dollar to $1.2499 and dropped 0.46% versus the euro to €1.1592 after data showed growth in the UK services sector eased more than expected in January.

The Markit/CIPS UK services purchasing managers’ index declined to 54.5 from 56.2 in December, missing expectations for a reading of 55.8. A level above 50 indicates expansion while a reading below signals contraction.

This was the first time the index fell since September and the reading marked the weakest expansion in three months.

In the US, all eyes were on the non-farm payrolls report. Employers added 227,000 jobs in January, beating expectations of 175,000 and following 157,000 in December. The unemployment rate, however, unexpectedly rose to 4.8% from 4.7%.

Andrew Hunter, US economist at Capital Economics, said while the strong gain in non-farm payrolls suggests the labour market started the year on a solid footing, the easing in annual wage growth is another reason to think the Federal Reserve will hold off raising interest rates until June.

In the Eurozone, IHS Markit’s final services PMI printed at 53.7 in January, in line with December and up from the flash estimate of 53.6. Markit’s final composite PMI, which measures services and manufacturing, was unchanged in January from December’s reading of 54.4, but up a touch from the flash estimate of 54.3.

Separate figures from Eurostat showed Eurozone retail sales fell 0.3% in December on the month, missing expectations for a 0.3% increase. On the year, retail sales were up 1.1%, undershooting forecasts of a 1.8% rise.