UK FTSE 100 index scales yet another record high today

Just yesterday the UK FTSE 100 index locked in the highest closing price ever, and today the index opened with yet more record highs after strong UK services data. 

The gains come amid improving risk appetite as the Bank of England prepares to cut interest rates soon. 

The pound’s drop against major rivals also helped improve the standing of UK exporters. 

Global sentiment improved as the concerns about an Iran-Israel conflict faded, especially following the latest remarks by the Iranian Foreign minister.  

The Price 

The FTSE 100 index rose by 0.80% so far today to 8,076, a fresh record high, after closing up an impressive 1.6% yesterday, the fourth profit in a row as the pound weakened. 

Improving UK Services Activity 

Earlier London data showed the UK services sector surged to 54.9 in April, beating estimates of a drop to 53.00. 

The sudden improvement in services overshadowed other data that showed the UK manufacturing PMI contracting to 48.7. 

UK Rates

A Bloomberg’s poll shows the Bank of England will likely start cutting UK interest rates starting June, with a total of 5 rate cuts expected this year. 

The odds of a June interest rate cut are up to 50%, with the markets now fully pricing in rate cuts in August and September. 

The Pound 

The pound fell 0.1% on Tuesday against the dollar, extending gains for the fourth straight session and approaching a five-month trough at $1.2299 on the prospects of a wider rate gap with the US. 

Iran-Israel Tension Soothes 

Iran’s foreign minister Hussein Amir said to the NBC that Tehran doesn’t intend to respond to Israel’s retaliation strike on Friday.