UK Spread Betting: Speculation of Fed Stimulus Boosts FTSE 100
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UK Market Comment, 20 June 2012
Closing comments from Will Hedden, Sales Trader, IG Index:
The afternoon session in London has seen the FTSE add modestly to yesterday’s gains, with the index around 25 points higher.
The countdown to the latest Fed meeting is underway, and it still seems that most people are hoping for more stimulus from the world’s most powerful central bank.
Having said that, it seems difficult to escape the impression that the market has overshot its expectations.
Only full-blown QE3 might now be enough to escape the disappointment that will take hold if Ben Bernanke doesn’t live up to expectations.
It is worth noting that gold has refused to participate in the recent rally, with the precious metal down for a second consecutive day.
Normally gold would do well out of QE3 hopes, since a further bout of money printing is usually positive for the metal, so its reticence does carry a degree of significance.
Away from the Federal Reserve, Spanish bond yields are enjoying that rarest of things at the moment, a down day.
Ten-year yields have dropped back from the highs seen yesterday, and are now back below 7%.
Of course, any further eruption of tensions could push them higher again, but, in this one area, the G20 meeting does appear to have had an impact. At least our political masters can go home happy.
How and where to spread bet on:
Gold, where to find free charts, live pricing, how to trade etc >> Gold Spread Betting
FTSE, where to find free charts, live pricing, how to trade etc >> FTSE Spread Betting
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
IG Index » "With IG Index you get all the normal advantages of
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UK Market Comment, 19 June 2012
Closing comments from Chris Beauchamp, Market Analyst, IG Index:
A quiet morning has given way to a busier afternoon for markets, with the FTSE building a solid 100-point gain and coming close to 5600.
The QE trade is back in fashion today, as markets rally on the hope that tomorrow's Fed announcement will show the US central bank has become more accommodating.
The logic runs as follows: economic data has got worse recently, and the Eurozone crisis seems to be entering a dangerous new phase, therefore central banks must step in to prevent another bout of heavy losses for equity markets.
The problem with this theory is that there is no rule that states the Fed must act.
Ben Bernanke's testimony to Congress earlier in the month provided some interesting comments. It seemed that the world's most powerful central bank, or its Chairman at least, was beginning to think it had reached the limits of what is achievable via an active monetary policy.
If tomorrow's policy announcement does not produce the expected round of fresh easing then the markets' disappointment could be bitter.
Also dominating investors' thoughts today is Spain. Bond yields for Madrid may have edged lower, but the consensus appears to be that Spain will have no choice but to ask for more aid unless there is a firm drop in borrowing costs.
Regardless of the various games being played out in Athens, it's Spain which is the bigger story and the bigger danger. It would pay to keep an eye on the country even while we wait for the Fed.
How and where to spread bet on:
FTSE, where to find free charts, live pricing, how to trade etc >> FTSE Spread Betting
Spain 35, where to find free charts, live pricing, how to trade etc >> Spain 35 Spread Betting
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
IG Index » "With IG Index you get all the normal advantages of
Spread Betting plus 8000 markets, narrow spreads, advanced charting,
24 hour spread betting ..." » read
IG Index review.
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Risk Warning: Financial Spread Trading and CFDs carry a high level of risk to your capital. You may lose more than your initial investment. They 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.
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'UK Spread Betting: Speculation of Fed Stimulus Boosts FTSE 100' edited by AG, updated 20-Jun-12
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