MARKET WRAP: FTSE 100 climbs; GBP, NZD soft; Oil higher

imageStock Markets17 hours ago (Aug 17, 2021 16:30)

© Reuters

Key Points

  • BHP lifts FTSE
  • Oil prices gain for first day in four
  • GBP weakens despite strong labour market data
  • NZD falls after Covid cases puts rate hike in doubt
  • Bitcoin steady near $46,000

By Samuel Indyk – The FTSE 100 finished the day in the green after starting on the back foot, supported by a jump in BHP Group (LON:BHPB) and shares in oil companies.

BHP Group shares rallied after the company announced it was combining its oil & gas assets with Australian rival Woodside Petroleum (ASX:WPL) to create a $28 billion energy giant, making it one of the top 10 independent oil & gas producers in the world. Separately, BHP is set to leave the FTSE after revealing plans to drop its dual listing of shares and move its main listing to Australia. BHP is currently the second largest company in the index by market cap.

BP (LON:BP) and Royal Dutch Shell (LON:RDSa) were also trading higher as oil rose for the first time in four days. However, the gains in crude benchmarks, such as WTI and Brent, were modest as the continuing fears of a demand hit from a slower recovery continue to weigh. Looking ahead, after market today the API releases its weekly US inventory data.

GBP was weak with GBP/USD hitting a three-week low despite what was mostly positive labour market data. The improving labour market prompted analysts at JPMorgan (NYSE:JPM) to bring forward their rate hike expectations for the Bank of England, saying a move is likely in Q2 next year.

One central bank that may not be hiking interest rates in the near future is the Reserve Bank of New Zealand, after a case of COVID-19 was discovered in Auckland. The central bank had been expected to hike interest rates overnight but the news of a nationwide lockdown has prompted some analysts to drop their calls for an imminent rate increase. The news sent NZD/USD lower, with the pair dropping over 1.3%.

Bitcoin and other major cryptocurrencies continued to tread water amid a lack of major catalysts to drive price action either way. Bitcoin hovered around $46,000 while some of the recent strong performers – such as Cardano, XRP, and Dogecoin – pared some of the recent gains.


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MARKET WRAP: FTSE 100 climbs; GBP, NZD soft; Oil higher

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