FTSE 100 WOBBLY ON CPI AND FED DECISION
FTSE 100 futures are currently trading at 7320.3-higher by 0.09% as compared to the previous closing. The contract, however, closed in the negative territory in the last trading session.
In the cash markets, the FTSE 100 lost 0.056% to 7,315.45 at the time of writing. The blue-chip share index swung between losses and gains in early trading as market participants awaited news on the U.S. central bank’s stance on monetary policy.
The Federal Reserve is set to announce its monetary policy decision today at 2 p.m. ET. The Central bank is expected to cut the benchmark short-term fed funds rate by a quarter-point.
Industrials weighed the most on the index. Engine maker Rolls Royce and contractor BAE Systems fell after Britain’s government ordered an investigation into the $5 billion buyout of defence company Cobham by a U.S. private equity firm.
Index-component Kingfisher dropped 2.43% after it reported a 2% decline in underlying earnings due to weak performance at its French business.
Luxury brand Burberry fell 1.52% despite investment bank UBS raising its price target while downgrading the sector.
European Commission President Jean-Claude Juncker said earlier today that Britain was on track for a damaging no-deal Brexit.
Homebuilders underperformed today with Taylor Wimpey falling 2.78% and Barratt Developments dropping 0.84%.
The midcap index FTSE 250 was up 0.052% at the time of writing.
The benchmark index is on track to end the week in the negative territory after rising for three consecutive weeks.
On the data-front, CPI (YoY) for August released earlier today came in at 1.7%. It was the slowest rate of expansion since December 2016. The CPI change was also below the market expectation of 1.8%.
In addition, PPI Input (MoM) for August also out today came in at -0.1%. The index change was above the consensus estimates of a fall of 0.4%.
On the technical front, the RSI is currently at 55.41% and suggests that the market can continue trading sideways. The current price is below the MA5. The current price is above the middle line of the Bollinger Bands but is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion- Limit Sell at 7327. Take Profit at 7292. Stop Loss at 7345