FTSE off record highs but dodges euro selloff

Heading into the close the FTSE 100 is marginally in positive territory as the European shakedown was halted at Dover. 

City of London
Source: Bloomberg

Mineral extractors prop up FTSE

The London market has escaped the European sell-off as the spat between Germany and Greece couldn’t cross the English Channel. The quantitative easing-fuelled rally in continental Europe was bound to be hit by profit-taking, and the concerns among Greece’s creditors was the perfect excuse to take some money off the table.

The strength in the metals market provided support for the London-listed mineral extractors, and this more than offset the small losses suffered by some of the British banks.

IG is offering political markets on the UK general election, and the IG general election binary is indicating that there is an 81% chance of no overall majority.

US markets extend gains

Across the pond the US equity market is registering early gains due to the bounce back in US existing home sales in February. The dovish commentary from Janet Yellen still rings out on Wall Street, and the bulls are gathering momentum to launch another assault on the record high.

The US equity market is indifferent to the events in Greece, and as long as US interest rates appear to remain ultra-low then there will be little that can derail this soaring market.

The US central bank will eventually have to move away from all-time low interest rates, while so many nations are loosening their monetary policy; the Federal Reserve is waiting for other economies to catch up before tightening its own policy.

Copper traders await HSBC data

Gold is gaining ground as fears over Greece have gripped equity markets. The precious metal is enjoying its time in the sun as the Fed isn’t rushing to raise rates, and now that Greece’s relationship with Germany is on the rocks again gold is back in demand.

Copper is on the rise as the pullback in the dollar has assisted the red metal, and relatively stable economic indicators from China recently have put the market in a positive mood ahead of the HSBC survey of Chinese manufacturing, expected overnight.

GBP/USD in retreat

The euro is edging higher as Greece sits down with Germany hoping to repair its tattered relationship. After a lot of big talk from the Greek finance minister, Yanis Varoufakis, Alexis Tsipras has to play good cop and hammer out a deal with the nations’ creditors.

Sterling is slipping against the greenback as tomorrow’s UK CPI report is playing on traders’ minds. The eurozone is already experiencing deflation and fear of this spreading to the UK is putting pressure on the pound.

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