UK Market Comments

Heading into the close the FTSE 100 remains under serious pressure as it looks to close down by over 40 points.

UK markets

Equity markets have struggled for any sense of perspective as both comments from economists and economic data have offered already jittery investors yet more reason to panic. The VIX fear index continues to bubble around year highs, and the FTSE has now seen gains acquired from back in June 2013 wiped out. Once again conversations around equity trading floors are focused on the sovereign debt market as Greek 10-year debt hits yields of 9%, well above the 7% danger level. Market commentators will once again be dusting off their ‘Greek Tragedy’ quotes as this move looks anything but a short-term blip. AbbVie’s comments about the Shire takeover have seen any lingering doubts that this deal could be salvaged put to bed , with the share price falling by another 8% today.

US markets

Not that equity markets needed someone to inject a little life into them by throwing about inflammatory comments, but that has not stopped Fed member James Bullard. His suggestion that the Fed postpone the end of its debt purchasing scheme saw volatility jump. Last night’s figures from Netflix looked remarkably like they were trying to shoot themselves in the foot, and the out of hours trading in the share price saw it drop by a quarter. Equity traders are feeling less than charitable at the moment, and it has started much as it performed overnight. Goldman Sachs once again has beaten market expectations, a record that is showing no sign of becoming unstuck regardless of the chaos surrounding it.

Commodities

Rather than slow down, the collapse in Brent crude shows no sign of being suitably attractive to entice value investors off the sidelines. The 27.5% fall in the price from the tail end of June could be added to, as investors remain cautious ahead of November’s OPEC meeting. How much of an excuse is gold looking for? Trader’s screens have been covered in red all week and this has triggered a flight to security, but this looks to be one flight that has landed already.

FX

GBP/USD has spent much of the day oscillating around the $1.60 level, as currency traders have debated who out of the US and UK has seen their timelines for interest rate rises derailed the most. EUR/USD has flirted with its 50-day moving average and subsequently seen much of its confidence and yesterday’s moves disappear. Considering the inflationary figures that we have seen earlier in the week, Mario Draghi must have been pretty relieved at this morning’s eurozone inflation figures.