Heading into the close the FTSE 100 is 60 points higher, boosted by the LSE news, while equity markets more generally are in solid, but cautious, form ahead of the ECB meeting tomorrow.
A growing sense of caution pervades markets ahead of the ECB decision tomorrow, but the gains in indices have nonetheless been widespread, if a little limited. This feels like the calm before the storm, since tomorrow is sure to provoke volatility; an ECB cut is now a certainty, which would set markets up nicely for a dovish Fed the following week, but it is debateable how long any post-ECB bounce will last. Volatility traders are firmly divided on what comes next, with VIX poised mid-way between the highs of last month and the calm of the first months of the year. A slightly more hawkish-than-expected ECB could, almost on cue, deliver traders the usual late September volatility that they have been expecting.
It is M&A time in UK markets it seems. First we had Galliford Try yesterday and now the much bigger news of the Hong Kong exchange’s move on the LSE. Unfortunately for many Brexiteers, the kind of freewheeling global capitalism they crave is likely to produce more such foreign swoops on UK firms, given the weakness of sterling. If the takeover is successful, which is far from certain, it would mark the departure of one of the best performing shares on the FTSE, reducing yet further the pool of companies managing to successfully navigate the post-referendum world.
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.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.