FTSE becomes a safe haven

Chris Beauchamp IG

European markets continue to wait for Catalonia news, while the FTSE 100 consolidates its gains.

FTSE gets a boost as investors shun Europe
IMF’s gloomy tone on UK ignored
Fresh record US high fades as earnings loom

European markets have found it hard going all afternoon, thanks to the impending speech from the Catalan president, which may (or may not) open the door to a declaration of independence. As a result, the UK has found itself an unlikely beacon of calm, with both the big-cap and mid-cap indices making small gains. The winners on the FTSE 100 have been an agglomeration of banks, miners, consumer goods stocks and housebuilders, suggesting a sizeable move into UK equities in order to reduce exposure to the situation in Spain. If a declaration of independence comes, the ball will be well and truly in Madrid’s court, with all sorts of worrying scenarios playing out in the minds of investors as they wait to see what Carlos Puigdemont has to say. Even the IMF’s warning about weaker UK growth thanks to Brexit failed to dent the enthusiasm for UK equities, given that there is probably no one left in global markets who doesn’t think Brexit will prove to be a problem. ‘Tell me something we don’t know’, seemed to be the message investors were sending the IMF.

On Wall Street an early flowering of bullish momentum sent indices to new records, but this faded as some brave sellers poked their heads above the parapet. Upward momentum has unsurprisingly dried up as earnings season looms; in a few days’ time we’ll be much better-informed about the health of the stock market, so the day before earnings really get started is hardly the one to be chasing a market at all-time highs.

Author

Chris Beauchamp

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.