Markets Move Higher Following Positive Fed Comments: Spreads News
Financial Market Comments from Anthony Grech, Market Strategist, IG Index.
At the mid-morning point in London, the UK’s leading index is up around 30 points, or 0.5%.
The FTSE’s early gains today were fuelled by yesterday’s positive forecast from the US Federal Reserve, which came after UK markets had closed.
The Fed pledged to keep rates in the current 0-0.25% range for an extended period of time, while simultaneously providing a generally upbeat assessment of the US economy.
The mining sector was the UK market’s engine room this morning, with Fresnillo, Xstrata and Kazakhmys leading the way, all up between 2.5% and 3% by 10.30am in London, as hopes for global growth were buoyed by the Fed’s report.
With cheap and easy cash on tap for the foreseeable future and a pretty decent bill of health for the world’s largest economy, it has been no surprise to see markets rally this morning.
For investors fearing a change of tone from the Fed, yesterday’s news was another reason to plough more cash into risk assets, despite the fact that markets have been looking slightly overcooked given the impressive recent rally.
The flipside, of course, is the fear that this loose fiscal policy will have economic strings attached in the longer-term. The theory is that when tightening does happen, it will have to be in the form of pretty aggressive fiscal cuts.
For the time being though, investors on both sides of the Atlantic have been given the reason they need to put more money on the table.
Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Good Luck!
DB
The above comments do not constitute investment advice 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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