Stocks have recouped some lost ground, while other risk assets are moving higher too, following the Bank of England’s return to QE.
QE headlines embolden buyers
“The Bank of England’s u-turn (at least for now) on QE has given embattled buyers a reason to step back into the market. While it might not be the big QE programmes of old, it seems the bank’s willingness to intervene is being taken as a good sign, especially compared to its inaction earlier in the week. After days of selling were are seeing another attempt to move higher, though Apple’s 3% drop following news of its decision to hold rather than expand iPhone production has limited gains for now.”
Risk-on mood broadens across markets
“Indeed, the BoE’s move might mark the low for now in risk assets. The pound is back above $1.07, the euro is higher against the dollar and oil prices are rallying too. Of course this doesn’t change the bleaker medium-term view, but after the recent wave of selling there’s hope for a bounce in the short-term.”
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