No surprises from BoE and ECB

Heading into the close the FTSE 100 is 40 points higher, boosted by global optimism having shaken off a volatile morning session.

The Bank of England (BoE) and European Central Bank (ECB) have delivered no surprises, but with the headlong rush to non-farm payrolls now firmly underway it was always unlikely that the central banks would provide more than the briefest of distractions. Still, with economic data looking better both Mark Carney and Mario Draghi will be glad that they don’t have to look too far for good news, and it looks as if a tentative recovery is underway in markets, after weeks of indecision.

UK markets

As expected there was no change from the BoE, leaving investors in London to concentrate on corporate news. Supergroup continues its transformation into a normal company, albeit one with a share price that has leapt over 100% this year. Now that all the hype has dissipated, a more sober approach can be cultivated, and for now it looks as if the company really is delivering on its promises, with the brand still remarkably resilient for a trendy fashion label. Broker upgrades did their bit for InterContinental Hotels and Marks and Spencer, the latter being viewed as a useful play on any recovery in UK consumer spending.

US markets

It was a slightly mixed picture for US data, with the ADP number coming in below forecasts, while factory orders and the ISM non-manufacturing reading proving better than forecast. All this is just a prelude to non-farms tomorrow; the importance of tomorrow’s employment reading is hard to over-estimate, given that the next US Federal Reserve meeting is barely a fortnight away. The effect is being felt in bond markets, as borrowing costs rise and the ten-year US Treasury Bond edges to 3%.

Commodities

Increased tapering expectations have meant that gold and silver are in retreat once again, both dropping to two-week lows. In oil a general absence of talk regarding Syrian intervention means that there has been less activity in this market, although traders will be watching the G20 meeting for any possible signs of movement. Given the current animosity between Washington and Moscow, we shouldn’t expect to see any great shifts in positioning among the major powers.

FX

There was little comfort for the euro this afternoon, as traders sold the single currency in the wake of the ECB press conference. Mr Draghi sought to emphasise that the bank would stridently counter any suggestion that rates would rise in the near future, since the shoots were still ‘very, very green’. Given the split on the council, the most likely outcome is that they will do nothing, but it may be wise not to goad policymakers too much.

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.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.