Markets pause after gains

A tentative move above the 6800 level for the FTSE removes the latest hurdle in its rally, although Bank of England minutes provided no surprise.

London Stock Exchange sign
Source: Bloomberg

Markets have eased off after the gains of yesterday, content to consolidate around these levels after all the volatility of the past week. Signs of division in European capitals reduced the chance of further organised sanctions against Russia, but there is still a faint chance that they will pull something together at the last minute, applying some eurozone crisis management to the situation.

SSE and London Stock Exchange have gone ex-dividend today, knocking a modest amount off the morning gains, but it was Capita that stole the limelight with a bullish update that points towards a strong year ahead. The shares have spiked over 3% to all-time highs, as investors got behind the chief executive’s plan for the year ahead.

Yet again the BoE minutes were a source of little excitement in voting terms, but a subtle shift does seem to be underway below the surface, as the recovery looks to become more established some committee members have become less anxious about a potential rate rise. GBP/USD continued to drift in the wake of the minutes but the general course of events does point towards a $1.72 reading here in due course.

It wasn’t the most thrilling set of results from Apple, but the figures were enough to assuage any lingering doubts about iPhone growth. iPad growth is a different story, and it seems the high price tag for the device is still acting as a deterrent for some consumers.

New all time highs on the S&P 500 yesterday came as geopolitical concerns receded, and while US Treasury yields maintain a clear distance from the 3% level there seems little that can really endanger the rally.

Ahead of the open, we are expecting the Dow Jones to start unchanged at 17,113. 

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