FTSE 100 and sterling both on the up
|Stocks are rallying for a second day, while the pound is on the up for now following the resignation of Boris Johnson.
Commodity surge puts FTSE 100 on top
“After a tough few days for commodity prices the buyers have come storming back, and the FTSE 100 has felt the benefits of this in a big way. Oil stocks and miners have once again provided the foundation for a bounce, putting the fight back into the index after a choppy few days. To be fair the global outlook for indices seems to be brighter in the wake of yesterday’s Fed minutes, if only because everyone seems to be glad to get the issue out of the way for a while. The recent fall in commodity prices might provide some temporary relief on inflation, and perhaps earnings season will surprise on the upside when it kicks off next week.”
Pound continues to edge higher
“Sterling is revelling in what is probably its last ‘Boris bounce’, moving up against the dollar and the euro as the political crisis of the past few days subsides. The only question now is whether Labour has the strength to upset the Tory-run handover of power and force a snap election through a no confidence vote in Parliament. Even this isn’t much of a risk to the (not very bright) economic outlook, given Labour’s tame policy positions compared to 2019.”
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