FTSE 100 finishes flat, USD weak, cryptos steady By Investing.com

Key Points

• FTSE 100 closing price of 7,034.86, +0.03%
• Vodafone falls as spending to increase
• UK labour market “turns a corner”
• USD weak as Fed hike fears ease
• Cryptos steady following Musk rout

By Samuel Indyk

Investing.com – The FTSE 100 finished broadly unchanged and well off intraday highs as a decline in Vodafone (LON:VOD) shares offset the earlier gains. The telecoms company fell over 8% after reporting results pre-market. Investors seemed to be worried about the increased capital spending as Vodafone said it would be accelerating investment in its network.

Some domestic reopening names were strong after the UK Prime Minister Johnson said there was currently no conclusive evidence to delay the end of coronavirus restrictions, expected to take place on 21st June. There have been fears recently that the spread of the ‘Indian variant’ in some areas would mean the UK would have deviate from the easing roadmap.

Carnival (LON:CCL), WH Smith (LON:SMWH), Trainline (LON:TRNT) and IAG (LON:ICAG) were some of the best performing companies in the FTSE 350.

The US Dollar was weaker across the board as Treasury yields remained relatively steady. The Fed has allayed fears of imminent rate hikes following last week’s CPI print and this has weighed on the USD.

“The market is starting to believe the Fed that we’re going to have low interest rates a lot longer,” said OANDA analyst Edward Moya.

GBP/USD reclaimed the 1.42 handle amid broad USD weakness and strong labour market data. The unemployment rate dropped further while the number in employment increased by 84,000.

“The latest UK employment data provides further signs that the jobs market has begun to turn a bit of a corner since the turn of the year,” said ING in an emailed note.

WTI and Brent crude futures were marginally lower as the opposing demand picture continues to play out. An increase in demand is expected in Europe and the US as economies reopen while the picture in Asia is still cloudy amid a high number of Covid cases. As a reminder, the API releases its private inventory data after market, ahead of Wednesday’s official EIA data.

Cryptocurrencies were stable following the rout seen in the wake of Musk’s Bitcoin U-turn. Bitcoin remained around $20,000 away from its all time high with the latest Bank of America (NYSE:BAC) Fund Manager Survey saying that managers think long Bitcoin is the most crowded trade.

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