Monday, 17 October 2005
Written by Daily FX Research Team
Sterling hit a 10-day high against the dollar as data showed that British house prices rose for the first time in six months between mid-September and mid-October. At 07:35 GMT, the pound sterling traded at $1.7660, after rising to $1.7734 earlier in the session. It was a touch weaker versus the euro at 68.35 pence. The pound got a boost last week from comments viewed as slightly hawkish by Bank of England Governor Mervyn King and Monetary Policy Committee members Paul Tucker and David Walton.
British traders have little data to trade upon on Monday as the RICS House Balance is the only release for today. Tuesday’s trading will be paced by significant inflation numbers. UK consumer price index will be a major release. The consensus expects CPI growth to slow from 0.4% to 0.3% for the month of September.
London’s equities markets moved higher on Monday as rising oil prices boosted the heavily-weighted energy sector. The FTSE 100 started the session 0.3 percent higher at 5,288.6 and the FTSE 250 rose by the same margin to 7,646.7. BP rose 2.5 percent to 629.0p and Royal Dutch Shell was 1.6 percent higher at £18.33. Other energy stocks also made gains, BG Group was 1.8 percent stronger at 492.5p, Burren Energy was 0.7 percent stronger at 765p and Tullow Oil was 1.8 percent higher at 232.3p.
Man Group, the hedge fund operator, denied that it was preparing a bid to acquire Refco, its US peer teetering on the brink of collapse after a cash crisis, following weekend press reports that the FTSE 100 constituent was considering buying part of the American company. Shares in Man started the day up 0.9 percent at £15.56.
Uncertainty over tomorrow’s inflationary figures controlled the U.K. fixed income market today. As a result the yield on the benchmark 10-year gilt fell 2 basis points to 4.39 and its price, which moves inversely to the yield, rose to 102.85.