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RSA drops but recovers lows
It has been a quiet day for most major markets – although the US stock market is open, Veterans Day means the bond market is closed, and this has been reflected in a lack of overall volatility. In London the FTSE 100 has been stuck in a 20-point range for much of the afternoon, making for a fairly boring 'big picture' view – but there have been some interesting individual stock stories.
RSA Insurance has been a big FTSE loser following the suspension of three senior executives at its Irish operation. Though it is unclear what exactly a routine audit uncovered, as the day went on some investors felt that maybe the initial knee-jerk sell off was overdone and stepped in to buy. The result was that RSA bounced back off the lows, but it was still trading down around 10% on the day.
US markets quiet but positive
The first hour or so for US trade has been fairly subdued because of Veterans Day, but sentiment among investors appears to be upbeat following Friday’s strong finish. The Dow Jones is already up by 20% for the year-to-date, and it may be tempting to wonder just how much upside there can be left; however, with the indices within a whisker of all-time highs once again, it does look set for another push from here. Hitting 16,000 looks perfectly achievable in the weeks ahead.
FX traders show caution
After the turbulence experienced by the euro last week, following the surprise rate cut, today has been a quiet session; though it continues to claw back some of its recent losses against the US dollar. However, with European GDP data out later this week, forex traders are still cautious about getting too enthusiastic, and we are likely to see little progress through the 1.3400 zone until this data is out.
Oil sees surge
On a day of quiet markets oil has enjoyed a late surge in the afternoon, seemingly helped by the lack of agreement over plans to limit Iran’s nuclear programme. The price has declined by around 10% in the past two months and there is a feeling that this may have gone far enough for now. With last week’s US unemployment numbers coming in better than expected, further positive economic data can only help to lift the oil price, and a run back up above $100 could well be the theme for the rest of this month.