Spreadex Market Update
Forbes’ hawkish voice of dissent in BoE sends sterling higher
"Sterling’s surprise resurgence spelled bad news for the FTSE, which saw the edge taken off its gains as the pound began to rise."
Though Forbes’ decision doesn’t mean that the BoE will be raising rates anytime soon, especially since she leaves the institution in June, with inflation creeping ever higher it does perhaps nudge the MPC closer to a hawkish position. The pound certainly thought so, at least, rising half a percent against the dollar to a 2 week high having been in the red by the same amount earlier in the day after the Queen gave her Royal Assent for the triggering of Article 50. The currency also likely benefited from Theresa May’s repeated statement that ‘now is not the time’ for a second referendum on Scottish independence, the Prime Minister keen to put another roadblock in the way of Nicola Sturgeon’s planned vote.
Sterling’s surprise resurgence spelled bad news for the FTSE, which saw the edge taken off its gains as the pound began to rise. The UK index is now up 0.5%, half of its peak intraday growth; it does, however, still remain just above 7400. The Eurozone indices found themselves in a similar situation; both the DAX and CAC saw their gains diminish as investors got over the Dutch election result. As for the US, the Dow Jones failed to make good on its promise to open above 20100, slinking back towards 20900 having lost its post-Fed rate hike buzz.
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