Heading into the close the FTSE 100 is 1% lower, as the dollar falls once again following US CPI.
- Stocks erase recent gains, especially in Europe
- US inflation still muted
- Little excitement in UK Spring statement
The recent outbreak of bullishness has taken something of a knock today, and it’s not hard to find the culprits. US CPI came in bang in line with forecasts, but evidently there were plenty of dollar bulls who had been expecting more, especially from the core figure. While this disappointed on the headline number, the three-month annualised change hit its highest level since early 2011. The problem for dollar bulls here however is even this measure promptly turned southwards after this seven years earlier. One month’s data is not enough to build a fresh bullish case for the dollar, so the beleaguered euro and sterling both got a lift, and this sent home markets into a tailspin. As the
session entered its final hour in London the FTSE continued to plumb new depths, although the US continues to hold on around the lows of yesterday’s session.
The Spring budget statement served up predictably thin gruel for markets, with the Chancellor able to offer little in the way of excitement. It would not do to attribute the bounce in the pound to the OBR’s forecasts, and the news that the UK won’t stop throwing money across the Channel until some forty years hence will not exactly excite the Leave Camp. Brexit remains the only game in town.
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