Stocks struggle to maintain upward momentum
|Equities are ending the week lower on the whole, although the FTSE 100 is winding up flat for the session.
- Stock markets suffer heavy losses
- Hawkish central bank turn unnerves investors
- Pound gives back some of Thursday’s gains against the dollar
Markets: it has been a topsy-turvy week in stock markets, but as the last full trading week of 2021 draws to a close in London the sellers appear to have the upper hand. Macro concerns might be playing a part but a lot of investors have been edging towards the door for some days now, and the lack of any lasting bounce in stocks this week has meant that more are looking for ways to book gains ahead of the two volume-light weeks that will bring 2021 to an end. While the initial reaction to the Fed move was positive, almost exuberantly so, as Wednesday’s FOMC and Thursday’s BoE hike recede into the past investors appear to be much more cautious, contemplating a year ahead where the tide of central bank largesse definitely starts to go out.
Pound: traders in GBPUSD have been hitting the sell button hard in recent weeks, and after a short bounce yesterday the wall of selling has returned. It appears that there is plenty of scepticism out there that Bailey and the rest of the MPC will opt to hike again any time soon. The best hope for sterling bulls probably lies in some short-term dollar softness instead.
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