As suggested in yesterday’s update, the multi-day rally took a pause today as gains were booked and positions closed in advance of next week’s key events including the UK Brexit vote (which may impact sterling negatively if the defeat is very large or conversely be positive if the defeat is narrower). Today’s move of over 1% in GBP vs USD may be portentous. Next week also sees a slew of trading updates and earnings as well as UK CPI, PPI and Retail Sales Data. In the UKX, PSON, PSN, ABF RIO are among those reporting while 22 of the MCIXreport 19 AIM shares and 15 Small Caps. In total 28 names are reporting from Consumer Services or Consumer Goods which will further update on how Christmas performed in the sector. 19 Industrials, 6 Financials, 5 Basic Materials and 3 O& also report: full details in the Calendar
Today’s price action saw the UK indices broadly flat to negative with the UKX and NMX off -0.2%: the MCIS continues to rally gaining another 0.8% while the AIM 100 was up 0.3%.
Looking beneath the indices: in the NMX only 8% of share are below their 8EMAs while only 6% are below 21EMAs with good recovery on the 5o MAs (34% below). The longer term 200MA is also improving although almost 75% of NMX shares are below their 200MAs. The MCIX is showing almost identical levels and is even more bullish on the shorter timeframes with only 8% below the 8 EMA and 4% below the 21EMA. AIM fell much further and is still recovering so 40% are below the 8EMA, 47% below the 21EMA while 60% are below the 50 and almost 80% below the 200MA
Oil pulled back almost 1% to below the $61 level while GBP gained over 1% to rally above $1.28 . Gold rallied 0.3% while the base metals performed well with copper up over 1% on the day
In sentiment, UK VIX dropped 12.5% to below 17: European VIX is at 17.5 while the US VIX is now below 19 and the CNN Fear Index is at 30