Risk assets in full flight

Heading into the close the FTSE 100 is 60 points lower, as the week gets worse for equities.

-       Fears over global economy push down stocks
-       Miners & Unilever both endure heavy selling
-       Dollar surge pauses for now

Wall Street has joined in the general flight from risk this afternoon, with the overnight Chinese export data still the chief culprit (although in fairness Bob Dylan being awarded a Nobel Prize would probably make anyone lose their faith in the future). The S&P 500 has hit its lowest level in almost a month, while the Dow Jones has briefly traded with a 17 handle. Such a steep drop is an overreaction if it is indeed primarily due to China, but it has certainly provided an excuse for investors to unwind some of their positions in miners such as BHP Billiton and Rio Tinto. Unilever’s disappointing update will also have hit sentiment, but the consistent record of growth in such a safe stock means that any dip is more of a buying opportunity than anything else. It will be interesting to see if Reckitt Benckiser’s figures next week paint a similar picture.

A weakening of the US dollar has given commodities a breathing space for now, with gold trying hard to rally after being stuck in a truly tedious range over the past few sessions. It was always going to be hard for the greenback to hold gains in the wake of Fed minutes that did not reveal anything earth shattering, but with expectations of a December move sticking at a healthy 64% the rally in USD may not be dead, but just resting.