Miners drag FTSE lower, while Dow hits 26k

Joshua Mahony MSTA Scope Markets

The FTSE has been dragged down by a weak mining and energy sector, while US indices push into fresh territory once again. Meanwhile, Bitcoin has begun a tentative recovery following a 20% sell-off

US markets outperform, as FTSE suffers at hands of miners
UK inflation disregarded despite surprise fall in core reading
Bitcoin slide could prove short-lived

The FTSE 100 has lagged its US counterparts once again today, as widespread losses across the mining and energy sectors proved a drag on the headline bourse thanks to the decline in iron ore, copper, crude and gold prices this week. In stark contrast, the US markets have led the way yet again today, with the Dow breaking 26,000 and the S&P 500 topping 2,800 this afternoon. While Citigroup banked a whopping $22 billion one-off charge in association with the new US tax reforms, markets remain in an optimistic, with the bank trading in the green as investors look ahead to a profitable 2018. The US banks have a promising time ahead, with the triple whammy of lower taxes, higher interest rates,
and the prospect of looser regulation driving optimism for the sector.

The UK inflation picture came back into focus today, with the widely expected decline in headline CPI accompanied by a surprise 20 percentage point fall in the core reading. The marginal GBPUSD weakness seen in the wake of today’s inflation figures highlight a general disregard for this rare fall, with the overwhelming uptrend seeing CPI rise from 0.2% to 3.0% in just two years.

The cryptocurrency market has once again proven itself to be in a league of its own when it comes to volatility, with Bitcoin falling 20% in early trade. With prices gradually recovering, we are in shaky territory where the nervous abandon ship, only for the ardent believers to pile back in with the expectation of another blockbuster run higher. With Bitcoin falling 40% over the past month, it is worth noting that the past two major selloffs in BTCUSD have totalled 36% (June-July 2017) and 39% (September 2017).

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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