Spreadex Market Update
Banks spanked over forex rigging, with Barclays hit hardest
Out of these banking giants Barclays was hit the worst. A combination of charges from the US Department of Justice, separate but related charges in regards to a joint investigation by the New York Department of Financial Service, the FCA and the CFTC, as well as a chunk of money to the Federal Reserve led to an a record fine from US and UK authorities of $2.4 billion. All of this was music to Barclays’ investors’ ears, as its stock soared by 3% following the news. It seems that investors are keen to draw a line under this saga, and given that Barclays holds around £2.5 billion in provisions, i.e. roughly $3.9 billion, despite the ‘record breaking’ aspect of the fines Barclays looks set to escape relatively, and for many frustratingly, unscathed.
Beyond the banking excitement the rest of the markets looked rather limp. The US open failed to inspire any motion in the Dow, despite it still nearing fresh record highs. With the Fed minute meetings to come tonight some kind of movement is almost guaranteed; investors might just need to wait for it. Target Corp posted a better than expected 52% increase in profits in its first quarter, overcoming its messy departure from Canada following the bankruptcy of its subsidiary in the country back in January, leading to a mild increase after the bell.
As it has all week, the 7000 level has a magnetic pull over the FTSE in both directions. Whilst the UK index hasn’t really dipped too far out of reach of this landmark price, it also hasn’t managed to escape its grasp when trying to post greater gains, leaving it lifeless, and largely useless, throughout Wednesday. Like the FTSE the Eurozone was similarly flat this afternoon, as little to no news from the region meant that Greek doubts dominated, causing a disappointing day for all.
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