Spreadex Market Update
FTSE resumes post-Brexit rebound despite wince-worthy current account deficit
Jumping nearly 1% the FTSE is now a hair’s breadth away from 6400, leaving the index higher than it was during the run-in to the referendum; in fact the FTSE is at its best price since the end of April, when it struck 6430. Gains in the commodity sector seem to be driving the FTSE’s rise, though losses in the banking and property sectors are preventing it from matching the growth seen on Tuesday and Wednesday. The UK index was likely aided by the semblance of order returning to the Tory party, with Theresa May (who has so far provided the most thorough Brexit outline) the front runner for PM, followed by Michael Gove, who plunged a knife into the back of former heir apparent Boris Johnson with his own leadership announcement this morning.
It is also interesting that the FTSE has managed to resume its rebound despite a woeful a current account deficit, though it perhaps explains why the pound looks far meeker with its 0.2% rise against the dollar. For the final quarter of 2015 the deficit was revised to £34 billion, with the Q1 2016 reading coming in at a far worse than expected £32.6 billion. The UK’s quarter GDP, meanwhile, was confirmed at 0.4% against the 0.6% seen in Q4 2015.
Looking ahead to the US open and a mild 0.4% rise from the Dow Jones should see the European gains continued into the afternoon. The US session provides a few more nuggets of data this Thursday, the Chicago PMI joining the usual jobless claims, though nothing that will truly distract from the market’s ongoing Brexit-obsession.
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