Market News & Analysis

Top Story

FTSE rallies as Carney comments hit pound

Comments from Bank of England governor Mark Carney about the influence of global economic slowdown on UK inflation and the need to possibly reign in UK interest rates rather than raise them caused the pound to tumble overnight but helped the main FTSE index rise to its highest level in ten months. 

Supportive signals from Asia were also weaker as markets there evened out after the initial burst of optimism over Sino-US trade relations began to fade. 

A mixture of consumer-focused firms including betting group Flutter Entertainment and sport clothes provider JD Sports led the index higher. On the declining side Sainsbury took a slight hit after the company reported a 1.2% drop in retail sales in the latest quarter. However, the actual stock lost only 0.3%, a relatively small decline given that the market has been pricing in lower sales at one of the UK’s largest supermarkets.  

The pound is still struggling this morning although it bounced off the morning’s low of $1.2550 as investors try to assess if any of Carney’s comments can be taken in a positive way for the currency. The BoE governor went out of his way to stress the positive impact a regulated deal-based Brexit would have on the UK economy. The BoE as well as the markets are currently assuming a high likelihood for a no-deal Brexit and have responses in place for this kind of outcome. 
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.