In mid-morning, the FTSE spread trading market is racing away, up 65 points as hopes of central bank intervention buoys the markets.
As the UK returns to work following the Jubilee celebrations, it seems traders remain in a cheerful mood.
Friday’s weak Non Farm Payrolls number has revived the idea of the Fed riding to the rescue. In addition today’s ECB meeting has encouraged some to think that the central bank is about to loosen policy in a bid to contain the growing crisis.
However, at the moment, this is merely speculation. Fed policymakers are known to be divided on the issue of further stimulus, and the ECB has shown no indication that it is about to start fire-fighting once again.
Meanwhile, Spain remains on the brink, with Madrid having made an open request for bank aid.
If neither the ECB nor the Fed hint at action in the coming days, risk aversion could easily reassert itself.
A surge in Australian GDP for the first quarter has provided some good news, but ultimately Europe is still dominating the agenda.
We are now into the final straight before the next Greek election, and this, coupled with Spain, will keep the euro at the top of news headlines.
The risk rally is expected to engulf Wall Street this afternoon, with the S&P 500 futures pointing to a rise of around 14 points on opening.
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Financial Market Comments from Chris Beauchamp, Market Analyst, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
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