FTSE 100 futures edge higher as UK looks to ease lockdown measures

FTSE 100 futures are up 1.6%, suggesting the May bank holiday weekend market will open higher, with investors welcoming the UK government’s plan to ease lockdown restrictions next week.

By law, the UK government must review its lockdown restrictions every three weeks, with British Prime Minister Boris Johnson unveiling his revised plans at 19:00 (BST) on Sunday.

Investors can trade the FTSE 100 directly, non-stop from Sunday 11:02pm to Friday 10pm thanks to extended hours available on IG’s platform.

FTSE 100 ends week on a high despite BoE economic warning

The FTSE 100 closed on a high on Thursday, up 1.4%, with the blue-chip index closing out the week in positive territory – rebounding after a disappointing performance last week.

Investors excitement over the prospect of lighter lockdown restrictions appears to have completely overshadowed the Bank of England’s dismal economic outlook for the UK economy in 2020 as a result of the Covid-19 crisis.

According to the BoE, the coronavirus pandemic could cause the UK economy to shrink by 14% in 2020. However, it also believes that the country can emerge from the crisis in 2021 and have a strong recovery.

‘The unprecedented situation means that the outlook for the UK and global economies is unusually uncertain,’ the BoE’s monetary policy committee said on Thursday.

‘It will depend critically on the evolution of the pandemic, and how governments, households and businesses respond to it.’

BoE Governor Andrew Bailey opted to leave interest rates at their record low level of 0.1% to assist the UK economy in coping with the economic impact of the Covid-19 crisis.

FTSE 100: technical analysis

The FTSE 100 has been regaining ground since last week's sharp decline into the 76.4% Fibonacci support at 5690, according to Josh Mahony, senior market analyst at IG.

Despite that sell-off, the uptrend remains intact for now, yet questions remain over whether the tide is slowly changing after significant gains since the mid-March low, he added.

‘Given the wider uptrend, the primary path for today is bullish, yet the gradual ascent seen this morning stands in stark contrast to the sharp decline at the turn of the month,’ Mahony said.

‘With that in mind, this rally may start to falter given the somewhat unconvincing nature of it. A break below the 5788 swing low would bring a more bearish outlook, with a bullish short-term outlook in play until then.’

How to trade the FTSE 100 this weekend

Did you know? You can trade forex and indices like the FTSE 100 during Saturday and Sunday with IG. Our world-leading trading platform is the only solution to offer weekend trading on indices. Using CFDs, you can be agile within our weekend markets. Whether you want to go long (buy) or short (sell) the FTSE 100 based on the above outlook, you don’t have to wait until the markets reopen on Monday to trade.

The weekend prices for indices and forex are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions.

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