Spreadex Market Update
Bob Diamond resigns
Papers went to press last night focusing on how Mr Diamond might come out fighting in front of the parliamentary hearing this Wednesday. But the real story of the day is now likely to be how he has given up the fight at Barclays.
The stock is volatile in early trade and has opened down some 2%.
The inflationary anticipation that saw prices higher yesterday in spite of a, frankly, horrible ISM number from the U.S. continues to prevail this morning. Overnight, Asian markets rallied for a fifth consecutive day, with the MSCI Asia Pacific index gaining 0.6% where Japan’s Nikkei gained 0.8%.
Metals, too, remain well bid ahead of the rate decision this Thursday, with investors seeking an inflationary home for their cash in the event the ECB eases further. Gold has struggled so far this year to perform in line with bulls’ hopes for $2,000 and beyond.
But, with central banks openly declaring their willingness to act, investors could be seen to rush to the yellow metal as they have done before.
Deflationary concerns, however, could persist. If prices that make up measures of inflation continue to fall as they have done this year, it makes little sense to own something today that is likely to cheapen in the future.
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