Risk-on momentum drives FTSE gains

•       FTSE punches to new highs
•       Monetary implications of Brexit boosts markets
•       Construction finally back into expansion once more

Today’s incredible rise in the FTSE 100 has been one of the biggest risk on moves of the year, with investors seeing in Q4 with a bang. The FTSE rally into all-time highs comes amid a wider trend change, with traditional havens, gold and the yen, seemingly breaking out of their bullish 2016 trends. Q4 has typically been the best quarter for stock markets and 2016 looks no different if we continue as we have started. Fears over the economic implications of a Brexit have been brushed aside in favour of a focus on the benefits a weak pound and loose monetary policy would bring to stocks. As Phillip Hammond said, we are in for a roller coaster, yet on initial evidence, markets like the idea.

This morning’s construction PMI provided a welcome boost for a sector which has been under pressure in the wake of the referendum result. Amid all the talk of dwindling domestic demand, it is the foreign buyers which seem to have stepped in to take advantage of a weak pound. However, while recent months have seen domestic construction demand stifled owing to a lack of confidence and rising import costs, it feels as though the tide has turned.