FTSE 100 Weekly Look Ahead: US-China Trade Wars Renew FTSE Selling

FTSE 100 Analysis and News

• Trade Jitters to Renew Pressure on FTSE
• UK Data in Focus: Inflation (Wed)

Trade Jitters to Renew Pressure on FTSE

After two weeks of outflows, the FTSE 100 saw its largest weekly gain since mid-July of 0.3% with a lack of new development surrounding the trade providing a reprieve for equity markets. However, reports late on Friday sessions stated that the US are looking to place $200bln worth of tariffs on Chinese goods as soon as this week. Consequently, this could renew pressure on equity markets as investors seek safer assets with the FTSE 100 possibly printing a fresh 5-month low.

Source: Thomson Reuters

UK Data in Focus

The main economic data point this week, will be the UK inflation report on Wednesday in which the headline figure is expected to drop slightly to 2.4% from 2.5%. Although, inflation will remain above the Bank of England’s 2% target, the fall in inflation subsequently reduces the necessity for the central bank to tighten monetary policy. As reminder, the BoE last week left monetary policy unchanged with the outcome regarding Brexit likely to be the biggest influence on the BoE’s monetary policy path.

FTSE 100 Price Chart: Daily Time Frame (January-September 2018)

Chart by IG

KEY TRADING RESOURCES:

• Just getting started? See our beginners’ guide for FX traders
• Having trouble with your strategy? Here’s the #1 mistake that traders make
• See our Q3 forecasts to learn what will drive FX the through the quarter.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX