Key to today’s trading could be economic data on retail sales, which have been recovering since plunging more than 8% in January
The FTSE 100 was today set to build on yesterday’s strong recovery, holding onto the ground above 7000 points as another turbulent week comes to an end.
Wednesday’s battering was followed by a 1% recovery on Thursday and today the FTSE was set to open up another 12 points at 7027. Not much of a rally, but a consolidation in positive territory nonetheless.
Wall Street last night snapped its three day losing streak with a positive finish which spilled over this morning into Japan, where the Nikkei rose 0.7%. However, Hong Kong and China had modest falls, tempering some of the optimism in Europe.
Key to today’s trading could be economic data on retail sales, which have been recovering steadily since plunging more than 8% in January. April’s figures should come in at a positive 4.5% on the month and a 36.8% gain on last year.
CMC Markets analyst Michael Hewson pointed out that the British Retail Consortium survey on the High Street has already shown a decent improvement month-on-month for April, so the Office for National Statistics (ONS) data should be similarly rosy.
If so, it will set the scene nicely for May’s numbers because April only included two weeks of the reopening of non-essential retail.
Also out today will be news on the wider economic recovery in the form of the Purchasing Managers Index survey. These flash figures give a snapshot of more recent trading and cover key economies such as the UK, Germany, France and the US.
In Europe, there is likely to be something of a lag because lockdowns there came in later than in the UK and many leisure and retail operations continue to be restricted as countries battle the Indian variant of Covid.
That said, May will be better than April as the vaccination programmes have started having an impact on infections and allowed some relaxation of restrictions.
The improvement in the UK economy will cheer Chancellor Rishi Sunak as it will bring improved tax revenues, possibly even allowing him to increase his spending on Britain’s battered public services.
