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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Early Morning Call: UK economy expands 0.1% in Q1 despite unexpected drop in March

The UK economy expanded 0.1% in the first quarter compared to the last three months of 2022, in line with expectations.

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UK economy

The UK economy expanded 0.1% in the first quarter (Q1) compared to the last three months of 2022, in line with expectations. March data, however, raised eyebrows. Monthly gross domestic product (GDP) unexpectedly shrank 0.3% compared to February. UK industrial production fell 2% in March year-on-year (YoY), less that the 2.9% drop expected by economists.

Equities

On the equity market, pharmaceutical giant GlaxoSmithKline (GSK) said after the market closed on Thursday that it planned to sell as much as £823 million worth of shares in Haleon, the consumer healthcare division it spun off as a separate company last year. GSK will sell as many as 240 million shares, equivalent to 2.5% of Haleon's total, through a placing to institutional investors. GSK's current stake is just under 13%.

Societe Generale posted better-than-expected quarterly earnings. France's third-biggest bank's net income rose 5.7% from a year earlier to €868Mln, almost double the average of four analyst estimates compiled by Refinitiv, driven by a strong FICC trading performance, up 16%.

Like Credit Agricole on Wednesday, Soc Gen FICC trading gains surpassed the ones of larger competitors like Deutsche Bank, Goldman Sachs and BNP Paribas. The company also more than offset the 11% income drop of its retail division. Group revenue was down 5.3% to about €6.7 billion, and Societe Generale maintained its 2025 financial targets.

In Germany, Allianz' quarterly profit jumped 329% to €2.03Bln. This marks a return to business as usual for the Germany insurer. Last year's performance was hampered by $6Bln worth of settlements and fines linked to Allianz Global Investors, one of the group's funds involved in a fraud case in the United States. The figure, however, fell short of a €2.327Bln consensus forecast.

Commodities

The second quarter is traditionally a peak demand season for industrial metals in China, but demand this year has remained subdued. Uneven recovery, a sluggish export market, and a rise in supplies in the market are weighing on copper prices, now at the lowest level in 2023 and heading for the biggest weekly drop since November.

Other metals are also affected. Zinc just broke January 2021 support and trades a two-and-a-half year low. Aluminium is now at its lowest level since October 2022.

Oil prices trade lower this Friday and are poised to record a fourth straight week of declines. The new round of oil output cuts announced early April by some members of OPEC+ has failed to boost oil prices. Instead, these have been hit by interest rate hikes and concern over the US debt ceiling.

Yesterday, OPEC kept its global oil demand forecast for 2023 virtually unchanged. World oil demand in 2023 will rise by 2.33 million barrels per day, or 2.3%.

Last week the Baker Hughes total rig count fell by seven to 748. The number of oil rigs in operation fell to 588 from 591.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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