Joshua Mahony MSTA
Scope Markets
A dovish Carney wasn’t enough to keep the FTSE afloat today, with oil majors dragging the index lower
- FTSE falls despite dovish Carney
- Rates unlikely to rise anytime soon
- Crude slips into bear market territory
Despite an optimistic open this morning, the FTSE has wilted into the close despite a dovish belated Mansion House speech from Mark Carney. The disclosure that Carney sees no reason to raise rates for the time being comes as no surprise given his voting pattern. However, with markets reeling from last week’s increased showing from the BoE hawks, today saw the focus return to the fact that in this current uncertain climate, we are unlikely to see rate rise anytime soon. Unfortunately the BoE are being pushed into an uncomfortable position, where the bank may have to deal with the very difficult situation of a high inflation-low growth economy.
Crude prices slid into bear market territory today, as the global glut continues to drive prices lower. Today has seen the third circa 3% drop in two weeks, despite the deal to extend the crude output within OPEC and non-OPEC members. The influence of commodity focused firms has been evident today, with oil and mining majors dragging the index into the red. Clearly with crude supply elevated and summer demand not keeping up, there is reason to believe we could be looking at a summer of discontent for oil bulls.
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