The FTSE seen a highly volatile afternoon, as a pound-fuelled rally has been swiftly undone by a deterioration in the energy markets.
-
Pound tumbles after Hammond comments
-
Russia opposition undermines OPEC oil cut
-
Commodity firms lead the way, after positive Anglo American figures
The pound fell heavily this afternoon, as Phillip Hammond chimed in with dovish comments ahead of today’s appearance from Mark Carney. Much of what Hammond said was fairly intuitive, with the statement that further sterling devaluation would impact inflation expectations providing nothing more than simple economic theory. However, we are now in a situation where robots are likely to act on any dovish statement and given the lack of buyers, everyone is pretty happy to jump on a freefall in the pound. Such a sizeable drop was always likely to push FTSE 100 valuations higher, as internationally based firms face the prospect of further FX driven profit revisions.
Rumours of Russian opposition to the recent oil cut has sparked a plunge in crude prices, dragging the FTSE along with them in the later part of the session. Coming just a day after Iraq refuted plans for a cut to their crude production levels, the unwillingness of Russia to reduce output would be a blow to the hopes of a deal. While Russia is not an OPEC member, it is less likely that Saudi Arabia will want to lose market share against large players such as Russia and the US.
Despite the late crude selloff, it is commodity firms which dominate the gainers today, with Anglo American helping to provide a leg up for the likes of Glencore and Rio Tinto, all of which were amongst the biggest risers on the day. Despite recent dollar strength, we have seen a remarkable recovery for commodities, driven by hopes of a resurgence in Chinese growth. With rising commodity prices comes upward revisions to revenue and profits, which are likely to be reflected once more when other major miners provide their latest trading statements.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD extends losses on dovish remarks from ECB members, trades near 1.0780
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD trades sideways above 1.2600 amid quiet session
The GBP/USD pair trades sideways around 1.2622 during the early Friday. The market is likely to be mute in light trading on Good Friday. Later in the day, the US Core Personal Consumption Expenditures Price Index will be released.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.