FTSE Higher Following Successful BoE Stress Test
Fiona Cincotta November 29, 2018 4:03 PM
Following a Fed inspired rally on Wall Street, the FTSE jumped higher on the open and retained its gains across the session.
Following a Fed inspired rally on Wall Street, the FTSE jumped higher on the open and retained its gains across the session. Whilst banks initially traded higher following a comfortable pass in the most recent stress test, commodity stocks did most the heavy lifting as they traced base metals and oil prices higher. A weaker pound also offered support to the UK index.
Dollar Cautiously Higher Ahead of Fed & G20
The dollar was trading cautiously higher following a sharp sell off in the previous session. A more cautious tone from Fed Chair Powell sent the dollar tumbling, as investors reassessed the Fed’s expected pace of interest rate hiking next year.
In light of a more dovish Powell, investors will now turn their attention to the release of the Fed minutes from the policy meeting held 25th – 26th September. The Fed hiked rates at this meeting. However, traders will be paying particular attention to discussions surrounding the neutral rate, in an attempt to gain understanding at where this level is.
The focus on the dollar in unlikely to end there as we head toward the start of the G20 meeting in Buenos Aires. Investors are showing signs of caution as trade issues swing back into focus. Going into the meeting the White House has been giving out mixed messages, which has resulted in the bar being set low. The dollar, which has benefited in the past from escalating trade tensions is trading just above break even versus a basket of currencies.
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