Heading into the close, the FTSE 100 is pushing towards a five point gain for the day, although US indices have fallen slightly into the red.

FTSE barely affected by selling

The more shallow run up in recent sessions for the FTSE 100 has meant it has been less affected by selling than is the case in Germany and the US. Low volumes are the curse of the current rally, with investor scepticism abounding with each move higher. Even so, as the Duitsland 30 and S&P 500 move higher, the FTSE is likely to be unable to resist being dragged along.

At least there was more M&A excitement, as Smith & Nephew jumped 15% before slumping just as quickly – Stryker’s quick denial provided fodder for some ‘quick off the mark’ shorters, but leaves the broader market none the wiser as to the potential for any actual bid. 

IG’s grey market in the TSB IPO has been launched, with an initial price centring around a £1.45 billion market capitalisation. After reports of ‘IPO fatigue’ in the market the price action should provide a good sense of whether investors are keener on this new entrant than has been the case for other recent arrivals.

US markets await GDP revision

With no economic data to steady them, US indices have fallen prey to some opportunistic selling today, but even now the momentum remains with the bulls. Short-lived gains quickly gave way to selling, and for the recent entrants to the rally now is the crucial moment. If selling gathers pace then they will have fallen victim to the latest bull trap, as the latest breakout proves to be a false dawn. The US GDP revision tomorrow could be the make or break data point, but expectations of a slight contraction are now so well priced in that anything even fractionally better than expected will be seized on with glee. So long as the S&P 500 holds above 1900 and the Dow Jones above 16,640, we can expect this market to push on further.

Gold and silver hit fresh depths

Gold and silver have plumbed fresh depths today, but it is a mere coda to what was a frenetic day of selling yesterday. Although the equity rally has more or less stalled today there are still a few sellers of precious metals still out there, but many gold bugs will probably relish the chance to load up some more long positions as well. If gold doesn’t find a bid soon, the next stop could easily be $1239, a support level from mid-January.

Meanwhile the oil market is seeing its first bout of heavy selling in almost a month, as traders finally decide to book some profits after an impressive rally for Brent and NYMEX. Delayed inventory data has provided an opportunity for some to speculate that supply levels will rise, but the underlying theme of output pressures thanks to Ukraine and Libya remains.

GBP/USD runs into 100-DMA

GBP/USD has run into the 100-day moving average for the first time in two months, as US dollar strength finally contrives to knock sterling from its perch. Mortgage data yesterday, weak retail sales data today and a warning from Nationwide have acted as a catalyst to deal a major blow to what had been one of the most consistent trends in the FX market. The break through $1.6750 is the most worrying sign, but it is probably too early to call time on the rally just yet, with only a loss of $1.6660 signalling the surge to $1.7000 is off the cards for now.


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CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.