The FTSE 100 Index held steady near its all-time high of £10,250 as the recent bull run stalled amid a new tariff war between the US and the UK. It was trading at £10,200, up by 35% above the lowest level in April last year. It has jumped by 3% this year.

FTSE 100 Index steady after Trump tariff threat 

The FTSE 100 Index reacted mildly to the new tariff threat from Donald Trump during the weekend. He warned that the US will implement additional tariffs on goods shipped from the UK and other European countries starting from February 1.

The tariff rate will then grow to 25% in June if the United States does not complete or made progress on its purchase of Greenland. 

Therefore, the ongoing performance of the Footsie is a sign that investors anticipate that the tariff threat will not be implemented. Also, the index has jumped to a record high after the US implemented its tariff last year.

Additionally, there is a likelihood that the Supreme Court will strike down these tariffs as soon as Tuesday this week.

Key catalysts for UK stocks this week 

The FTSE 100 Index will have some more catalysts this week. First, there will be some earnings this week, which will shed more color on the performance of key companies. Some of the top companies that will release their numbers this week are Burberry, JD Sports, JD Weatherspoon, Curry’s, Associated British Foods, and Harbour Energy.

These earnings will come in the same week that more American companies will publish their financial results. Some of the most notable of these companies are Netflix, GE Aerospace, Johnson & Johnson, and Procter & Gamble.

The FTSE 100 Index will react to key macro data from the UK, which will provide more information about the state of the economy. 

The Office of National Statistics (ONS) will publish the latest jobs report on Tuesday, with economists expecting the report to show that the unemployment rate improved from 5.1% in October to 5% in November.

Additionally, the UK will release the December consumer and producer inflation report on Wednesday. Economists expect the upcoming report to show that the headline CPI rose from 3.2% in November to 3.3% in December, while the core CPI moved to 3.3% as well.

If these numbers are accurate, it means that the Bank of England (BoE) will likely maintain its interest rates unchanged in the coming months. This explains why the ten-year Gilt yield has jumped from 4.3% in January 14 to the current 4.41%.

The ONS will then release the latest retail sales data on Friday this week.

FTSE 100 Index technical analysis

FTSE 100 Index chart | Source: TradingView 

The daily timeframe chart shows that the FTSE 100 Index has rebounded in the past few months, moving from a low of £7,538 in April last year to the current £10,220. 

It recently moved above the important resistance level at £9,920, its highest level on November 12.

The Relative Strength Index  (RSI) and the Percentage Price Oscillator (PPO) have continued rising, with the former moving to the overbought level of 73.

Therefore, the most likely scenario is where the index continues rising as bulls target the next key resistance level at £10,500. A move above that level will point to more gains, potentially to the psychological level at £11,000.

The post FTSE 100 Index forecast ahead of UK inflation data and key earnings appeared first on Invezz