Even with a rebound on Friday, last week was rough, with US-China tensions especially helping to drive markets lower.
Well, this week got off to a better start, thanks to one Jerome Powell. When asked if the Federal Reserve has done all it can do in an interview for 60 Minutes, Powell stated that ‘there’s a lot more we can do...we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have’. This went some way to reversing the losses Powell provoked last week, when the Fed chair appeared to take negative interest rates off the table.
Giddy at the thought of some more monetary juice being pumped into the markets, European investors woke up with a spring in their step. With its oil and mining sectors seeing strong gains – ranging between 3.2% (Antofagasta (LON:ANTO)) and 5% (BP (LON:BP) and Glencore (LON:GLEN)) – the FTSE took back more than 110 points, lifting the index above 5900. It may need an extra helping hand, however, if it is to return to last week’s Sunak-assisted 6000-plus highs.
The Eurozone was even more excited. The DAX rose 240 points, once again sticking its nose across 10700, while the CAC climbed around 2%, crossing 4350.
At the moment they Dow Jones futures are looking more restrained, with a 220 point – or 1% – increase pencilled in for this afternoon. What actually happens when trading resumed stateside may be dependent on Trump, namely if the President has anything more to say about China this Monday.
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