Spreadex Market Update
Pound widens losses while FTSE 250 continues to suffer
Down over half a percent against both the dollar and the euro sterling is continuing to feel the post-Brexit pinch this morning, falling far enough that even the FTSE 100, previously buoyed by the prospect of cheaper exports, is starting to suffer. Having crept 0.3% higher soon after the bell the UK index has now fallen nearly 1%, pushed lower by the banking and housing stocks.
In even worse shape was the FTSE 250; the predominantly UK-based index has now lost around 10% in value since the referendum results were announced, a stark contrast to the performance of its bigger brother. What is especially worrying is that Mark Carney specifically pointed to the FTSE 250 as an accurate reflection of market sentiment, painting a pretty dire picture of how investors feel about the UK at the moment.
With the euro continuing to hit fresh highs against the pound the Eurozone indices remained miserable this morning, the DAX and CAC dropping a whopping 2% as the day progressed. That makes its around 4% lost in the past 2 days, effectively wiping out whatever recovery the indices had managed last week.
Looking to the US open and the Dow Jones is set to fall by around 75 points after the bell, dragged down by the weight of the dollar. There will be a mild distraction from the post-Brexit gloom this afternoon in the form of the Markit and ISM services PMIs; the former is expected to rise to 51.5 from 51.3, while the latter is forecast to jump from 52.9 to 53.3.
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