Positive notes but markets still cautious

Markets are finishing the week in positive territory, but are still cautious having endured their worst week in two months. 

London skyline
Source: Bloomberg

UK markets

The past week has seen profit warnings by the score, plus an increase in concerns surrounding China growth and Federal Reserve policy. Banks have risen on news that there may be a co-ordinated settlement of FX manipulation charges, but overall the market itself is still looking distinctly weak.

Any close below 6650 for the FTSE 100 will put the bears in charge for the week to come, especially in an environment where looming non-farm payrolls keep equity investors on the sidelines. With two trading days of the quarter left we could see fresh lows in the early part of next week, especially if China and US figures on Tuesday are below expectations.

Sellers of supermarkets are still to be found, as Sainsbury’s and Morrisons have discovered today, while real estate trusts such as British Land and Hammerson are finding buyers thanks to their solid dividend appeal.

US markets

US indices have seen some booking of gains by shorters, which has allowed the Dow Jones to recover the 17,000 level. Technical traders will still be watching the Russell 2000 after its ‘death cross’ this week, even if support is still likely to be found around current levels. The macro calendar next week is busy enough to bridge the gap until earnings season, but the lesson from the end of the third-quarter is that volatility is back on the agenda.

The coming three months should see a much more cautious atmosphere, particularly if improving US data lends weight to the theory that an interest rate hike is coming much earlier than expected.


What began as a morning of small gains for gold turned into yet another day of selling, with gold pushing back towards $1200. This is the problem for commodities at present – they do poorly on days when stocks are up, and on days when the dollar is up.

For the time being, until such time as another geopolitical event crops up, additional downside for commodity prices looks fairly certain, especially as long as the US dollar is in favour. This applies even to crude prices, where the short-term bounce in US light crude seems fated to come to an end as supply considerations take over.


Having tested $1.27 yesterday, EUR/USD is falling once again. This week has not been particularly busy on the macro economic front, although speeches from Mario Draghi have done their bit to imply that the euro will be going lower in due course.

In the week to come, German and eurozone unemployment and price data will act as a useful prelude to the European Central Bank meeting, but if Mr Draghi is to restore confidence he either needs to implement full blown quantitative easing or find a form of words that has proved to be more reassuring than his pronouncements so far.

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.