UK Markets Rally as US Politicians Reach Fiscal Cliff Deal
In mid-morning trading, the FTSE is up almost 100 points, as markets applaud the news from the US on the dreaded fiscal cliff.
In the end, they did it. It was hardly a smooth ride, and fears of a last minute attempt to throw in spending cuts provided plenty of drama, but US lawmakers were able to put together a deal that averts the fiscal cliff.
Cynics will point out that another argument has been booked in for two months time, when the debt ceiling comes up for debate. The Republicans will be looking to make progress on the spending cuts that haven’t featured in the New Year deal.
However, for now, the UK spread betting markets are just relieved that we moved into 2013 with some sort of deal.
Yesterday’s decent Chinese manufacturing data has helped to boost the optimistic mood, and even the UK has provided a positive surprise, with manufacturing growing for the first time in nine months.
6000 proved to be a leap too far for the FTSE in 2012, but with the index sitting only ten points away this morning, it looks as if this level will be reached in short order.
It’s back to the daily round of economic figures, however, with US ADP numbers out this afternoon, in advance of non-farm payrolls on Friday.
IG’s US futures begin trading at 11am, but the likelihood is that we’ll see a positive start as Wall Street mirrors the performance of markets around the world.
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Financial Market Comments from Chris Beauchamp, Market Analyst, IG Index.
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