Carney clobbers cable
|In mid-morning trading, the FTSE 100 is 17 points higher, while Mark Carney does his best to talk down the pound.
- Rally extends into a second session
- Sterling slides as Carney speaks
- Barclays back in the spotlight
Markets in the UK and Europe have totted up a few more gains this morning, after an impressive session yesterday. The size and breadth of yesterday’s bounce, which took hold across European, UK and US indices, suggests that we are in the midst of another sustained move higher.
Mark Carney shattered the calm of the Tuesday session, as he said that now was not the time for rate increases in the UK, adding for good measure that he was still worried about Brexit. It was hardly surprising to hear the governor himself air his well-known dovish views, but coming less than a week after a surprise flapping of wings among the MPC’s policy hawks, it was enough to send the pound lower versus the dollar and the euro. His cautious view on Brexit, one reiterated by the chancellor as well, has also ruffled feathers among sterling traders, with reports of the first day of Brexit negotiations not helping matters. Leaks from the talks should be expected from now on, which will mean the summer is not likely to be a quiet time for those monitoring the pound and its various crosses.
The shadow of the financial crisis was case across the City once again this morning, thanks to the news that Barclays and former executives were being charged with fraud. The market reaction belies the seriousness of the charge, which has the potential to be the biggest investigation faced by the bank. Once again, we are reminded that the fallout from the crisis is still ongoing.
Ahead of the open, we expect the Dow to start at 21,524, down 4 points from Monday's close.
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