FTSE off its lows

Heading into the close the FTSE 100 is down 25 points, although it is comfortably off its lows for the day.

Markets have recovered from their earlier brief panic, and the afternoon session has seen major indices return to their long-standing uptrends. If there is to be a longer sell-off than just one morning it will need the support of some weak data, and none appears to be forthcoming at present.

UK markets

Although still below 6600, the FTSE is not quite as under pressure as was the case earlier on in the day. UK GDP was in line with expectation, which was not sufficient to ignite much excitement among investors; but some can be forgiven for hoping that this signals the start of a steady improvement in growth figures for the embattled British economy. Normally staid publisher Reed Elsevier saw its share price rise to an all-time high after it hinted at a hefty payout for shareholders in the coming years, which would make it arguably as attractive as its rival, Pearson.

US markets 

Economic figures from the US were more mixed today, with a slightly higher jobless reading countered by improved durable goods orders. However all attention was focused on Facebook, which has seen its shares surge to the highest level in over a year. This will probably give Mark Zuckerberg enough cash to go out and buy another hoodie, but the share price now looks awfully vulnerable to some opportunistic selling, with many long-suffering investors doubtless tempted to walk away from the table after this latest heaven-sent gift.

Commodities

It’s hard not to get the impression from gold and silver that these two metals are about to begin the next leg of their ongoing jaunt lower. Having seen the price-surge run out of steam the metals look somewhat over-exposed, although some central bank activity next week might provide some support if policy-makers hint at further accommodation. Given today’s GDP reading from the UK, however, Mark Carney might opt for yet another month of ‘wait and see’ a week from now.

FX

GBP/USD has responded in a suitably reserved, British manner to the GDP reading; with studied indifference. Still, it does suggest that optimism about the UK economy will lead to another retest of $1.5400 in the near term, and the aforementioned Bank of England meeting could give the  pound sufficient impetus to move yet higher.

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