Banks lead FTSE higher

In London, the equity benchmark is up nearly 3% as the banking sector drives the market higher.

Comments from both the Bank of England (BoE) and the European Central Bank (ECB) have provided a boost to the equity markets in Europe. Mark Carney, the new governor of the BoE, had his first meeting today and chose not to rock the boat; he voted in favour of keeping interest rates and the quantitative easing programme unchanged.

The ECB also decided to keep their monetary policy unchanged. Both these decisions lifted investor confidence, as is indicated that central bankers are willing to do what it takes to fix their respective economies. The lower the cost of borrowing, the better it is for equity market as investors may seek higher yields in stocks.

The New York Stock Exchange is closed today due to Independence Day in the US, so all eyes are on the non-farm payrolls and US unemployment report tomorrow. The current rate of unemployment in the US is 7.6% and economists are expecting it to drop to 7.5%; if it drops more than expected we could see traders sell equities for fear of tapering.

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