FTSE continues to struggle

Markets have turned lower during the afternoon, with the FTSE 100 dropping below 6800, but the focus is on the pound which has come within a whisker of $1.70.

Barclays knocks FTSE back

The FTSE 100 continues to flounder this afternoon, after results from Barclays knocked the index back from a nine-week high. Figures from the bank show that it still has a lot of problems to iron out, as Anthony Jenkins looks to transform the financial titan from an emblem of uninhibited capitalism to one more suited to the post-crisis world. Barclays needs to pull something fairly impressive out at its strategy meeting on Thursday, as it is this that will set the direction for the months to come. Mr Jenkins must continue to rein in the investment bank to suit public tastes, while simultaneously avoiding tipping the division into a death spiral.

Some ghoulish souls have begun reading the funeral rites for Mothercare, after the company was forced to ask for breathing space over a refinancing facility. It was rescued from the brink once before, but the company’s survival as an independent entity is now in serious question, and more than a few firms might now be weighing up the more promising bits of the business.

Twitter shares could head lower

US stocks have struggled too this afternoon, with caution prevailing in the continued lull between non-farms last week and Janet Yellen’s testimony tomorrow. The attention was back on Twitter, whose shares have hit fresh lows following the expiration of a lock-up for employees. The brief recovery in the shares from last week is now over, and those bargain hunters that went in search of deep value are finding themselves being unceremoniously ejected from the stock. Lacking a reason for optimism, it is difficult to see how the shares are going to avoid moving lower from here.

Gold under pressure

It looks like gold is coming under pressure once again, despite surging above $1300 yesterday. Physical demand appears to be on the slide again, and exchange-traded fund selling is beginning to make its presence felt. Some buying has occurred on the back of Ukraine concerns, but for the moment we are still rangebound in the $1280-$1330  band that has prevailed since the beginning of April. 

GBP/USD fails to reach $1.70

In the perverted beauty contest of major currencies, sterling is a clear favourite. Fans of round numbers have been frustrated today, as GBP/USD failed to touch $1.70, but the move through $1.69 from this morning, based as it was on yet another good UK services PMI reading, has carried us back to August 2009 levels. Set against a US economy that is producing mixed signals, and a eurozone that isn’t bouncing back, investors have plumped for the UK, even if there are still plenty of problems this side of the channel. The Bank of England will have to muster all its staying power to withstand the inevitable discussion on rate hikes that is likely to hit soon.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.