Incisive market analysis into the year ahead - Your Outlook 2021 is now online. Get started by reading: End of the Brexit transition period and Market implications of C19 vaccines.

FTSE Higher As Stimulus Flows And Mood Improves

Fiona Cincotta March 20, 2020 7:12 AM

FTSE to jump on open after a week off speedy and aggressive central bank stimulus

European markets look set to follow Wall Street and Asia higher, as the risk tone in the market has improved slightly after another volatile week. The dollar is pausing for breath after its 8 day surge.

The coronavirus outbreak continues to escalate, with Italy experiencing more deaths than China, California ordering people to stay at home and London looking towards an imminent lock down.

Yet despite the rapidly growing numbers and stricter measures being implemented to contain the virus outbreak, there is a calmer mood among traders today. This comes after a week where central banks across the globe have shown that they are willing to do whatever it takes to help their economies cope with the impact of coronavirus.

Rishi Sunak Next?
Following on from the BoE’s second emergency cut on Thursday, which has brought interest rates to their lowest level in the bank’s 325 year history, UK Chancellor is expected to unveil a vast rescue packages aimed a protecting workers’ jobs and wages as the coronavirus pandemic continues to hit businesses. This comes after the £330 bailout blowout announced Sunak earlier in the week.

The US Senate was also debating a trillion-dollar package that would include direct help for Americans and relief for small business; steps to stabilise the economy. China could also be set to release trillions of yuan in fiscal stimulus to revive the economy.

The speed with which the central banks have brought in measures, and the depths that they have shown that they are willing to go to, to cushion the economic impact from coronavirus is easing fears. Cautious hopes of a relatively quick recovery are growing.

FTSE Levels to watch
FTSE futures are pointing to a 3% jump on the open. On the 4 hour chart the FTSE is approaching the 50 sma. A break above here could see more bulls jump in.
Resistance can be seen at 5375 (today futures high), prior to 5420 (50 sma) and 5700 (high 13th March).
Support can be seen at 5142 (today’s futures low) prior to 4945 and 4831 (yesterday’s low).

TAGS:

UK 100

More from UK 100

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.