Just like on Monday, a session that started off quiet for the FTSE soon went south – though this time it was sterling’s fault.
Well, to be more precise, Andrew Bailey’s fault, by way of the pound. The Bank of England governor once again appeared to shoot down the idea of negative interest rates as a potential tool for the MPC, stating that though ‘in simple economics and maths terms, there is nothing to stop it at all’, he feels there are a ‘lot of issues’ with that option.
Acting as a salve after days of covid-19-related anxiety, cable jumped 0.6%, crossing the $1.36 mark it fell below last Thursday. Against the euro, meanwhile, sterling was even more aggressive, climbing 0.7% to a 6 and a half week high of €1.1195.
With the pound feeling perky for the first time since the start of the New Year, the FTSE was kicked down a peg or two, slipping 0.6% to 6,770. It still has a way to go before it loses all of the gains seen in that explosive open to 2021; however, it seems to have run out of the kind of market-grade N2O that propelled it to that pre-pandemic peak.
Away from the UK’s local news, the markets were having a quiet one. The DAX was essentially unchanged, leaving it just under 13,950, with the only CAC marginally better, up 0.1% top 5,560.
Carefully watching the 2nd attempt to impeach Donald Trump, the Dow Jones was content to defend its recent record levels, hovering around 20 or so points below 31,100 following a 0.2% increase.
The governmental practicalities of the attempts to prematurely remove Trump matter less to the Dow than the ground-level reaction from his supporters, and the instability that could bring. The FBI is reportedly worried about ‘armed protests’ and the ‘storming’ of buildings across the country if the exiting President is given his marching orders early.
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