Banking Sector Weighs on UK 100 Spread Betting Market Ahead of Osboune’s Speech
In mid-morning trading, the UK 100 spread betting market is down 20 points.
In London, the banking sector is weighing on investor sentiment, as traders are afraid Chancellor George Osborne will break up the banks.
First there were reckless lending policies that fuelled the property bubble, and once this burst the country was dragged into what could be a triple-dip recession.
Then we had the mis-selling of payment protection insurance to the unsuspecting public; lastly there was the LIBOR-rigging scandal.
All of this has infuriated people across the UK, and now the Chancellor must be seen to be doing something about it.
Mr Osborne wants to make sure that banks don’t take on too much risk and have to go cap-in-hand to the government.
Tighter controls might help keep their doors open, but they may find it harder to make a profit.
We are expecting the Dow to open 20 points lower at 13,990 today.
The margin requirements for French and Spanish government bonds have been cut by LCH Clearnet, and this tells me that the risk factor has been reduced.
Having said that, the move could leave them in a vulnerable position if any uncertainty is cast over the two countries.
When you consider the start to the year we’ve had, today’s pull-back is relatively small.
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Financial Market Comments from David Madden, Market Analyst, IG Index.
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