Apart from some notable gains at the start of the month, October has been something of a non-event for the FTSE 100 with the market trading in an incredibly narrow range of less than 100 points for the past 3 weeks. The benchmark continues to hover just shy of its record peak but at present seem to lack the catalyst to follow its peers in the US and Germany higher and into uncharted territory. The pound is also rangebound on the whole, but there are growing signs that a deeper pullback may lie ahead should we get a negative shock from either the BoE or the Brexit negotiations.
Solid European data ahead of ECB
On what is a fairly quiet day of economic data, a series of PMI releases from across Europe have come in better than expected on the whole. Above forecast readings from the manufacturing sector in France, Germany and the wider Eurozone further support the notion that the bloc is performing well and that 2017 will be a year of impressive economic growth. Against this backdrop there are growing expectations for the ECB to reign in some of the extraordinary monetary stimulus measures currently in place with. The conclusion of the latest central bank meeting on Thursday is widely expected to see some further details on this matter announced, with an extension of the current QE programme, albeit at a slower pace of purchases, the most likely outcome.
Interesting moves in crypto as hard fork begins
The creation of a new cryptocurrency called Bitcoin Gold has occurred overnight with the new market expected to be open to the public by the start of next month. The “hard fork” will complete a process that began back in July with the new asset created from the original Bitcoin blockchain. The concept behind this new market comes from a perceived problem at present that miners as a group have too much influence over the Bitcoin network. Bitcoin Gold will replace bitcoin’s current mining algorithm with one that is far cheaper to run using less complex graphics processing units. Proponents of the new market believe this will alleviate the current problem that mining has now become highly centralised into the hands of large mining companies and therefore goes against what is arguably Bitcoin’s main selling point of decentralisation. In terms of market moves the new cryptocurrency is yet to be accurately priced but there has been some selling seen in the original, with Bitcoin down by more than 3% on the day. The drop in the market leader is even more notable given the relative strength seen elsewhere with Ethereum and Ripple making impressive gains of 7% and 10% respectively.