Carney rate comments and Ukraine ceasefire boost markets

A green hue overcame the markets with ceasefire news from Ukraine and interest rate news from the UK buoying the markets.

After spending the week enthralled with the Eurozone crisis and oil’s instability, the FTSE finally got its own news to chew on, as Governor Mark Carney discussed the Bank of England inflation report. Carney stated that the first interest rates rise is likely in 2016, sooner than expected, and despite the fact that inflation is set to turn negative in spring for the first time in half a century due to cheap oil and food, the Bank raised the UK’s GDP forecasts. He also reaffirmed that real wage growth was finally starting to increase, whilst commenting that the bank will ‘look through’ the fall in oil prices and admitting that economic uncertainty has started to creep in as the UK approaches the general election. The overall positive tone of this news saw the FTSE shake off the cobwebs and begin to post gains, with sterling not far behind it as it increased against the dollar and the euro.

There was good news for the Eurozone, as Putin agreed to a ceasefire beginning on the 15th February. This, combined with the news that the IMF had tentatively agreed $17.5 billion of an overall $40 billion plan for economic aid for Ukraine, saw the Eurozone indices boosted by over 1% across the board as the chance for stability in the region, however brief, increased.

Yet as progress was made in the more violent of the Eurozone’s pressing issues, its economic crisis is no closer to a solution, with the Greek government denying they ever received the statement that was reportedly nixed by Tsipras last night. However, the deal in Russia has caused the start of the EU summit to be delayed, meaning the European markets have seen a relative absence of the kind of vague platitudes and contradictory comments that have been a regular fixture this week, instead basking in a rare moment of success for the region.

Over in America, the US markets will finally be able to turn away from Europe as core retail sales, unemployment claims and business inventories are all announced this afternoon. The US markets managed to sneak to a positive close last night, despite a woeful earnings release from Tesla and the political stagnation in the Eurozone, and futures are pointing to a strong open as the markets escape the stifling atmosphere that plagued the start of the week. However, forecasts suggest that this afternoon’s data might not be the news the US needs to continue its rally.