London Stocks Flat as US Inflation Looms; Gilt Rates Surge
13 Jun 2023
London midday: Stocks flat ahead of US inflation; gilt rates rise.
FTSE 100 was unchanged at 7,568.46
The unemployment rate was slightly lower than anticipated in the three months leading up to April, according to data from the Office for National Statistics, although pay growth picked up.
Regular pay, excluding incentives, increased by 7.2% from February to April, exceeding forecasts for a 6.9% increase and up from the previous three months’ gain of 6.8%. The growth rate was the highest outside of the Covid epidemic.
Contrary to forecasts, average total compensation, including bonuses, increased by 6.5% during the quarter, up from a growth of 6.1% during the preceding three months.
The unemployment rate, which was expected to reach 4.0%, was announced at 3.8%, up from 3.7% in the previous quarter but below the 3.9% reported a month earlier.
Although the boost is greatly appreciated by those on low incomes, it comes at a very difficult moment when policymakers want to see spending power reduced, not bolstered, to help slow the rate of price increases. “The hikes to minimum wage levels, up over 10%, partly explain the gain.
The pound increased against the dollar on the news, moving closer to the $1.26 level amid expectations that the Bank of England will keep raising interest rates while the Federal Reserve is prepared to halt tomorrow in the United States.
FTSE 100 TECHNICAL ANALYSIS DAILY CHART:
- FTSE 100 is currently trading in the down channel.
- FTSE 100 is currently trading below all SMA.
- RSI is in buying zone which suggests bullishness and Stochastic is suggesting no trend.
- Immediate resistance is at 7607.5 & its immediate support level is 7581.5
HOW TO TRADE FTSE 100 IN THIS WEEK
The FTSE 100 is currently trading in a downward channel. It attempted to climb upward, but it was unable to do so sustainably, and the price has since started to fall once more. It is currently trading at a key support level; if this level is broken, further declines are expected.