Spreadex Market Update
Dow Jones grazes fresh all-time peak while pound sees pre-BoE jitters intensify
The main excitement this afternoon came from the Dow Jones, which briefly grazed an all-time high of 18390 not long after the bell. That’s an undoubtedly remarkable achievement, especially considering the lows struck in February and the market turmoil post-Brexit. Yet realistically the Dow hasn’t had much of a region-specific workout since the Fed seemingly put any further rate hikes on hold. Next week, then, could be key for the US index, as the second quarter earnings season begins in earnest; while Thursday and Friday sees the first few banking sector reports, the main Q2 coverage starts on Monday, and could see the Dow struggle to maintain its current peak dependant on the performance of its key stocks.
Beyond the US there was little for investors to really play with. The FTSE crept over 6700 by a handful of points, while the DAX and CAC hovered around 9950 and 4350 respectively. The pound, meanwhile, began to lose its momentum as the day went on, falling 0.3% against the dollar and 0.4% against the euro.
Sterling’s slide is understandable, as tomorrow brings with it the first Bank of England rate vote since the Brexit nearly 3 weeks ago. With analysts around 80% certain the central bank will cut rates to a fresh all-time low of 0.25% (or, even more dramatically, 0%), the pound could be in for more heavy losses on Thursday, especially since it has given itself for room for fall with its post-Theresa May PM appointment gains.
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