The markets remained dominated by the reaction to the morning’s UK inflation reading, with a bit of North Korea/Hurricane Irma relief thrown in for good measure.
Sterling spanked its currency peers this Tuesday, surging 0.7% against the dollar and 0.8% against the euro in the aftermath of a better than expected inflation figure (and a 6-year high core CPI number). That took the pound to some important markers; cable is now sitting pretty at above $1.326 at a one-year peak, while against the euro, sterling has climbed to a fresh 6-week high.
These gains had important ramifications for the rest of the markets. First and foremost it prevented the FTSE from joining in with the gains seen elsewhere, instead sending the UK index back below 7400 – if only just – with a 0.1% dip. It also gave a big ol’ helping hand to the DAX and CAC, which rose 0.5% and 0.7% respectively thanks to a mixture of euro-losses and general market cheer.
As for the Dow Jones, the dollar’s continued dive against the pound – despite a record JOLTS job openings reading – allowed the index to climb 50-ish points to cross 22100. If these gains pick up speed after the European session the Dow could well find itself ending the day at a new all-time high.
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