The FTSE 100 defied weak markets in Asia overnight and selling on Wall Street on Friday to trade higher on Monday morning as investors await key US and UK inflation data later this week.
AJ Bell investment director Russ Mould said: “Back above the 7,900 mark and within striking distance of its recent all-time highs the index continues to build on its gains of recent months, but the confidence that remains is about as fragile as a fine china cup.
“For the time being investors have largely been happy to ride out shocks like unexpectedly strong economic data from the US, good news which could turn out to be bad if it caused the Fed to go back on the offensive with interest rates, however a renewed uptick in prices on both sides of the Atlantic could shatter sentiment.
“The expectation is inflation will have eased slightly when the US and UK report tomorrow and Wednesday respectively.”
Meanwhile Europe’s economy is expected to avoid falling into recession this year, the European Commission said this morning.
The EC has just released its new winter forecasts, and has hiked its forecasts for growth in 2023. It no longer expects a recession this year.
Instead, forecasts now expect eurozone GDP to rise by 0.9% during 2023, up from the 0.3% predicted three months ago.
Announcing the forecasts, the EC says: “Almost one year after Russia launched its war of aggression against Ukraine, the EU economy entered 2023 on a better footing than projected in autumn.”
The wider European Union is expected to grow by 0.8% (again, up from 0.3% expected before).
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