Chinese Pledge to Aid Eurozone Boosts Index Spread Trading Markets
Mid-morning trade has seen the FTSE regain the 5900 level, up 16 points as markets opt for the ‘China rescuing the Eurozone’ story once again.
The sudden cancellation last night of the Eurogroup meeting scheduled for today prompted a sell-off yesterday in the index spread trading markets.
However, markets recovered their poise in the wake of comments from China’s central bank governor, who repeated an existing pledge that China stands ready to help the Eurozone in its present difficulties.
The prospect of Chinese largesse being liberally applied to stem this never-ending crisis is a powerful tonic for beleaguered investors, especially coming at this time, when it looks more and more likely that Greece will be unceremoniously ejected from the Eurozone.
Impatience with Athens is building amongst the AAA-core of the Eurozone, namely Germany, Finland and the Netherlands, aided by the belief that the necessary measures to contain a Greek default and prevent contagion are now in place.
An increase in UK unemployment knocked back risk appetite slightly, and pushed the sterling lower for a third consecutive day, as the January rally in the GBP/USD fizzles out.
Later on in the session, the Bank of England will release its latest musings on UK inflation, while the Fed’s most recent set of minutes will be published after UK shares markets close.
If the minutes show guarded optimism among policymakers, then this might inject more fuel into the rally, with 6000 still a respectable proposition from the FTSE’s current position.
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Financial Market Comments from Rupert Osborne, Futures Dealer, 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.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.
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