Spreadex Market Update
FTSE continues to climb thanks to Bank of England rate cut and QE injection
Opening over 40 points higher the FTSE is back in 12 month high territory having slunk away from these levels in the run up to yesterday’s MPC meeting. Interestingly while the rate cut and £60 billion QE-injection has caused the UK index to post a 2nd day of notable gains, it hasn’t led to another sharp fall from the pound. For now it seems that sterling has settled just below 1.18 against the euro and just above 1.31 against the dollar, neither price as bad as what was seen in the immediate aftermath of the Brexit referendum.
Elsewhere the Royal Bank of Scotland found itself in the spotlight for all the wrong reasons. Posting a half year loss of £2 billion thanks to a growing legal bill RBS failed to find the same investor-pleasing counterweight as HSBC did earlier in the week with its massive share buyback scheme. This meant that the largely taxpayer-owned stock had little choice but to fall, dropping around 4% to hit the £1.83 mark it had only just begun to escape.
As for the Eurozone indices, well, there wasn’t exactly a wealth of data for them to deal with. And what was released wasn’t great; German factory orders came in at -0.4% in June, far below the 0.5% growth expected. This explains why the DAX lagged its French counterpart this Friday, rising 0.4% to the CAC’s nearly 1% jump.
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