Reflect and Prepare

Friday, 21st April 2017 15:27 - by Reflect & Prepare

Only one place to start this week, UK's PM May calling the snap election on the 18th. GBP/USD first plummeted on the news, but as traders and investors started to gather more details cable then bounced back to push through to the 1.29 handle. The FTSE 100 index reacted in spectacular fashion and sold off to finish the session down 2.46%, in comparison the FTSE 250 finished marginally higher (1.16%) as the strong GBP tends to hurt profits of the larger cap names which are denominated in USD.

PM May's decision to call this election goes against her previous rhetoric and many analyst's believe that she has chosen now due to her superior position in the poll's compared to Corbyn's Labour.  In terms of commentary, Deutsche Bank, told clients that holding elections now will give Westminister more time to properly negotiate the UK's exit terms without the threat of elections in 2020 hanging over it, strengthen the PMs hand in negotiations with Brussels and reduce her reliance on the most hardcore Eurosceptics.

In small caps this week MYSQ and URU performed well this week. Imperium Ltd bought a further 30mln shares or 7.6% of the Myanmar-focused social media group, which in turn puts shares up a total of 33% this week. URU insiders were loading up on shares this week exercising options at 6P! Soo far shares are up a massive 28% on the week. The Aim markets is a funny animal as on the other end of the scale AST shares fell a whopping 19% over the week as it reported first gas sale in Slovenia, early profit takers after the gap up on the day of the report.

In the FTSE100 Unilever shares rose after the company rose its quarterly dividend by 12% and sales rose 2.9% in Q1 and for once FX movements didn't impact earnings. Rio Tinto's first quarter copper production fell 37% month on month and year on year due to issues at its mines in Chile and Indonesia and the Co. cut its mined copper guidance to between 500,000 and 550,000 tonnes for the year from its previous guidance of between 525,000 and 665,000 tonnes. Elsewhere, Essentra pushed after stating that trading for the financial year to date had been in line with the board's expectations. Associated British Foods shares rose after the Co. raised dividends and stated that profits rose in h1 as sugar prices helped profits, they went on to say Primark has opened 16 new stores in 8 countries. To round off our company news, oil names have been worried about the recent drop in oil prices as inventory level grow. WTI and Brent battle to stay above 50.00/bbl but OPEC talks loom and surely they can come to some kind of agreement.

Next week, look out for the ECB rate decision and CPI, UK and US GDP, BoJ monetary policy statement and Australian CPI. Earnings in the UK come from: Amec Foster Wheeler PLC, Whitbread PLC, BHP Billiton PLC, London Stock Exchange Group PLC, Standard Chartered PLC, GlaxoSmithKline PLC, Persimmon PLC to name a few.