FTSE 100 futures dragged lower after Fed offers grim economic outlook

FTSE 100 futures are down 4% after US Federal Reserve Chairman Jerome Powell warns of grim outlook for the US economy, with the news likely to weigh on UK stocks this week.

FTSE 100 futures are down 4% after US Federal Reserve Chairman Jerome Powell warns of grim outlook for the US economy, with the news likely to weigh on UK stocks for the remainder of this week.

UK stocks were dragged lower on Thursday by Powell’s forecast, with the FTSE 100 closing almost 4% lower at 6076.

IG offers extended hours trading options for the FTSE 100 index and other major indices. Buy long or sell short on the FTSE 100 via CFDs and other instruments provided by IG's market-leading trading solution. Start today by opening an IG account.

FTSE 100 drops into Fibonacci support

The FTSE 100 has seen sharp declines over the course of this week, with yesterday’s drop through the head and shoulders neckline at 6312 providing us with a swift slump back into Fibonacci support. That 76.4% Fibonacci level has provided support thus far, with the price holding up in early trade, according to Josh Mahony, senior market analyst at IG.

‘The uptrend does still remain in play on this four-hour chart, with the ability to remain above 6041 key to seeing the bullish trend persist,’ Mahony said.

‘For today, we need to see whether this Fibonacci support holds or not, with a break below that 6153 level signalling a potential continuation of this decline, and move towards that critical 6041 level,’ he added.

OECD warns of 'tightrope walk to recovery'

On Wednesday, the Organisation for Economic Co-operation and Development (OECD) said that the global economy faces a ‘tightrope walk to recovery’.

With little prospect of a vaccine becoming widely available this year, and faced with unprecedented uncertainty, the OECD presented two equally likely scenarios – one in which the virus is brought under control, and one in which a second global outbreak hits before the end of 2020.

‘If a second outbreak occurs triggering a return to lockdowns, world economic output is forecast to plummet 7.6% this year, before climbing back 2.8% in 2021,’ the OECD said.

‘At its peak, unemployment in the OECD economies would be more than double the rate prior to the outbreaks, with little recovery in jobs next year.’

‘If a second wave of infections is avoided, global economic activity is expected to fall by 6% in 2020 and OECD unemployment to climb to 9.2% from 5.4% in 2019,’ the OECD added.

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.

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.

Ready to start trading indices? Open a live account or practise using a demo version today.


The information 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 Bank S.A. 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 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.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.