Better than expected UK retail sales figures for April certainly helped, while higher inflation numbers and a rise in the price of oil might also be considered as positive developments.
The jump in the Consumer Price Index (CPI) was attributed to the so-called Easter effect. Inflation is expected to hit 3% on the CPI measure and even more if you take the Retail Price Index, which includes housing costs, as your guide. If higher inflation sees the Bank of England adopting a more hawkish approach to monetary policy, sterling should be a beneficiary. A gentle rise in interest rates is likely to be taken well by markets.
News that two big oil producers are planning to maintain production cuts well into next year drove oil higher. Brent crude drove back over $50 a barrel, a level at which many view as less harmful to economies dependent on oil revenues, while not adding too greatly to cost pressures. It is a strange world indeed when rising prices are greeted with relief.
Otherwise both corporate and economic news are failing to disrupt sentiment, though things are looking increasingly tricky in Washington right now. Fortunately geo-political hotspots seem to be taking something of a back seat at present. Some comfort can also be taken from the fact that volatility in share markets remains low.
But with the General Election only just over three weeks away, political influences will be playing an increasing part in market sentiment here at home. Presently Prime Minister Theresa May is expected to increase her majority, but three weeks is a long time in politics. While the publi cation of the main parties’ election manifestos brought few surprises, it is worth remembering that many people have yet to make up their minds on who to support.
Doubtless there will be the odd issue or two as the election debate rumbles on which could send a wobble through shares. With so much else going on in the world, not least the way in which the uncertainties surrounding the Trump administration has created a demand for Euros amongst investors, our general election feels a little like an unwelcome distraction. I’ll be glad when it is all over.