Selling pauses for now

Chris Beauchamp IG

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.”

Author

Chris Beauchamp

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