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Morning Report – Friday 7th May

FTSE to open at 7,103 (+27 pts)

UK stocks hit 14-month highs yesterday as the Bank of England upgraded its growth forecast.

The central bank now expects the UK economy to grow 7.25% this year, up from a previous forecast of 5% made three months ago and the highest rate in more than 70 years.

There is now a very present risk that the bank will overshoot it’s 2% inflation target this year. With this in mind, that banks Monetary Policy Committee said the pace of continuing bond purchases “could now be slowed somewhat”.

Traders on both sides of the Atlantic chose to focus on the positive economic forecast and the FTSE closed at its highest level since February 2020, and the S&P is back within touching distance of all-time-highs.

?Risk Barometer Explained

The FTSE broke and closed well above the April swing high resistance level we highlighted in yesterday’s Morning Report.

Prices have now pushed up into an area of potential resistance created the broken summer 2019 support area. Whilst you can’t see it on our chart below, it’s worth your while zooming out and looking left on your own FTSE chart.

Despite the potential resistance zone, momentum and trend are firmly bullish on the FTSE, and we’re likely to maintain a long bias to our trading portfolio.

FTSE 100 Daily Rolling Futures – Key Levels