Spreadex Market Update
FTSE and pound widen rebound as banks take another £3 billion in liquidity from Bank of England
Jumping nearly 2.5% the FTSE climbed back above 6100 having flirted with that level during yesterday’s choppy trading. There were similar scenes in the Eurozone, with the DAX and CAC rising by 2.2% and2.7% respectively. The pound also widened its gains, taking back 1.3% off the dollar and half a percent off of the euro to bounce away from Monday’s lows.
The main change from yesterday to today seems to be the performance of the banks. Accepting around £3 billion in a Bank of England liquidity auction this morning, the UK’s banking sector is looking a bit rosier after having the colour completely drain from its face at the start of the week. Barclay, Lloyds and RBS are the key stocks here; the trio suffered the most in the aftermath of Friday’s Brexit announcement, diving up to 30% in the last 2 days of trading. Today, however, they have risen anywhere between 4% and 6%; a long way off from recapturing all of their losses, but a start nevertheless.
Looking ahead to the US open and the Dow Jones seems ready to join in with the day’s recovery, the futures suggesting a 130 point rise after the bell. For those who are still paying attention to such things the US actually has a few pieces of notable data this afternoon, namely the final first quarter GDP reading, expected to improve to 1.0% from 0.8% at the annualised rate.
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