FTSE under pressure as miners suffer

Joshua Mahony MSTA Scope Markets

Weakness in metal prices has been a drag on the FTSE, amid an already tough time ahead of a potentially hawkish BoE tomorrow. Meanwhile Bitcoin enters bear market territory as Wall Street has its say.

FTSE regains ground after tough start
Miners dragging FTSE due to weaker metal prices
Bitcoin enters bear market territory

The FTSE has tried its best to regain lost ground today, with the hawkish connotations associated with yesterday’s rise in UK inflation driving early losses. The failure of UK wage growth to keep up with the incessant rise in in UK inflation is creating a widening gap which will drive down real incomes, hurting consumption driven economic growth. The UK economy remains the ongoing theme of the week, with the Bank of England expected to provide a more hawkish statement at tomorrow’s meeting.

Miners provided a drag upon the FTSE 100 throughout today’s session, as the deterioration in both precious and industrial metals dragged the likes of Antofagasta, Anglo American, Fresnillo and Glencore to the bottom of the leaderboard. Copper was today’s big loser amongst a sea of red for metals, while a selloff in gold in the face of equity market weakness saw the precious metal finally trade like a physical commodity rather than just a safe haven asset.

Bitcoin has grabbed the attention of traders once more, with Wall Street stalwarts Jamie Dimon and Mohamed El-Erian both doing their best to talk down the hopes of this new disruptive technology. With Bitcoin falling over 23% in less than two weeks, we have now seen the cryptocurrency break into bear market territory. Past experience tells us that Bitcoin will likely brush these latest challenges aside, yet with Chinese regulators clamping down and big name financial leaders talking Bitcoin down, this has been a tough fortnight for cryptocurrencies.

Author

Joshua Mahony MSTA

Scope Markets

Joshua Mahony is Chief Markets Analyst at Scope Markets. Joshua has a particular focus on macro-economics and technical analysis, built up over his 11 years of experience as a market analyst across three brokers.

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