UK Market Comments

Heading into the close the FTSE 100 is up 35 points on what might be the UK's last day as single state.

UK markets

Alex Salmond's moment in the sun has finally come. The Scottish are voting on the future of their country as we speak, but seeing as stocks with large exposure to Scotland are rallying it would suggest the support for the ‘Yes’ campaign is fading. Our binary bet on the outcome of the Scottish referendum is now showing an 18% chance of a ‘Yes’ vote. Traders were given a shock by the YouGov poll that put the ‘Yes’ campaign ahead nearly two weeks ago, but the sentiment has shifted to the ‘No’ side and traders have used the Salmond shake up as an opportunity to pick up cheap banking stocks.

US markets

In the US, the Dow Jones is up 80 points at 17,237. US equities have extended their gains as traders prepare themselves for an interest rate rise in early 2015. The QE scheme is in its final stretch, and now traders are coming around to the idea that rates will not remain at rock bottom forever. Our clients are indicating a market capitalisation of $224 billion, the highest level since March, for Alibaba's IPO; a 37% premium over the company’s guidance ahead of its potentially record-setting float tomorrow.

Commodities

Gold hit an eight-month low after the Fed hinted at a sooner -than-expected interest rate rise. Copper has also been hit bit by the strong US dollar as the cash injection by the PBoC did little to stem the fear that the world’s second largest economy is slowing down.

FX

The euro is slowly crawling back the ground lost to the US dollar in the wake of FOMC meeting. It has made gains following the beginning of the TLTRO program, combined with some euphoria (however misplaced) over the ECB's voting rotation scheme. Sterling is having a stellar session on the day as the Scottish go to the polls for the referendum on independence, and the jump in the pound suggests that traders are pricing in a ‘No’ vote.