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.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.