FTSE prepares to run to June highs

Options expiry day has seen the markets move higher, with the FTSE 100 ending the week up 25 points.

City of London
Source: Bloomberg

TSB gives FTSE confidence

A successful IPO has been the ideal way to round off a week that has seen the FTSE wobble but then bounce back. TSB has started its new life on the front foot, and where TSB goes, others are likely to follow. It seems there is an appetite for challenger banks, and although with over 600 branches TSB is not exactly challenged, it is the ideal standard bearer for those following behind. A 10 times oversubscribed flotation signals the IPO market was not entirely exhausted, merely somewhat crowded. Meanwhile, the FTSE itself remains on course for 6880, but only a close above here would send a message that the charge to the 1999 high is on the cards.

Fed and Iraq balance US markets

Yet another record high beckons for the S&P 500, although it has been a quiet end, with Iraq worries being one of the main elements at play. The after-effects from the Federal Reserve meeting have yet to fade entirely, and optimism about the direction of Fed policy has the upper hand slightly, as the gains indicate, but ultimately the Fed and Iraq balance each other out neatly for now. That could change next week if fresh news emerges, with the rising oil price a perfect way to put some volatility back into trading. 

Copper up over 1%

It has been copper’s turn to rally today, up over 1%, as the metal is boosted yet again by continuing talk of measures to boost Chinese growth. Low volume is exaggerating conditions, but bruised copper bulls will probably take anything at the moment, as the commodity looks to break higher again. However, it is now running the risk of hitting the 2014 downtrend, which in itself is simply the latest leg in the long-running downtrend. Silver has risen again, but it desperately needs to push above $21 – now sharply overbought, the metal will struggle for traction in the coming week.

Euro watchers await ECB meeting

The forex market has drifted today, lacking the necessary catalysts to move on. Some strength for the dollar has returned after the heavy week, thanks to Janet Yellen and the FOMC, but when US data returns in earnest next week, in the form of manufacturing PMI and durable goods orders, sentiment should rebound more firmly. Euro watchers will keep a close eye on the $1.3500 level, as we hurtle towards yet another European Central Bank meeting at the beginning of July. Mario Draghi can be pleased with his work so far, but there is still much to do to right the listing ship that is the eurozone.

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