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MARKET WRAP: FTSE hits highest level since Feb’20, oil higher, USD weak

© Reuters.

Key Points

FTSE 100 closing price of 7,515.7 (+0.14%)
Ocado benefits from upgrade
Crude higher, energy names jump
USD soft despite strong ADP
Bitcoin struggles for any momentum

By Samuel Indyk – The FTSE 100 edged higher on Wednesday, touching its highest level since February 2020 as fears of an Omicron induced slowdown subside for now.

Ocado Group (LON:OCDO) was the outperformer in the blue-chip index after the company was upgraded to ‘buy’ from ‘hold’ by Berenberg. The bank said that the sell-off previously observed in the shares means that this is an attractive entry point, however, they cut their target price to £19.90 per share from £20.65.

WTI and Brent crude futures held onto gains following the latest US inventory data. Oil stockpiles declined by 2.1 million barrels in the latest week. Brent traded back above $81 per barrel for the first time since 26th November.

The jump in oil prices comes the day after OPEC+ continued its policy of 400,000 barrel per day monthly increases in production, suggesting that they do not expect the Omicron variant to have a long-term impact on crude demand, despite the high number of cases.

Energy names such as BP (LON:BP) and Royal Dutch Shell (LON:RDSa) posted gains in London as oil prices rose.

GBP was strong with GBP/USD touching an 8-week high after UK Prime Minister Boris Johnson reiterated that the UK will not need tough lockdown measures like those seen early in the pandemic.

The USD was soft despite strong data on the US labour market. ADP (NASDAQ:ADP) said private payrolls increased by 807,000 in the latest month, well above expectations of 400,000. The data is often seen as a precursor to the official labour market data from the Bureau of Labor Statistics which will be released on Friday. The data is expected to show the US added 400,000 Nonfarm Payrolls in December.

Bitcoin was again struggling for direction as the world’s largest cryptocurrency traded within recent ranges.

“As far as Bitcoin is concerned, this is the time of year for wild predictions, from prices crashing to zero to hitting half a million dollars,” said OANDA Senior Market Analysts Craig Erlam. “Which makes the forecasts were seeing of $100,000 – more than double its current price – look a little tame by comparison. Perhaps this is the phase Bitcoin is heading into, relative normality with periods of inactivity. Probably not though.”

Looking ahead, focus will be on the FOMC Meeting Minutes at 19:00GMT.


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MARKET WRAP: FTSE hits highest level since Feb’20, oil higher, USD weak

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