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FTSE 100 finishes broadly unchanged, GBP/USD higher, Bitcoin approaches $40K

EconomyJul 26, 2021 16:35
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Key Points

  • FTSE 100 closing price of 7,024, -0.05%
  • Ryanair results boosts airlines
  • GBP falls as Covid cases decline
  • Oil retreats as speculators cut long positions
  • Bitcoin surges towards $40,000 as Amazon (NASDAQ:AMZN) set to enter the fray

By Samuel Indyk – The FTSE 100 closed relatively flat on Monday in a relatively quiet day as traders look ahead to some of the key risk events later in the week, including the Federal Reserve interest rate decision and meeting and a slew of large-cap earnings.

Ryanair (LON:RYA) shares were trading higher after a relatively positive trading update where they upped the lower end of the forecast for passenger numbers in the current financial year. The budget airline also reported a smaller than expected loss for the three months to 30th June and said they might finish the year with “somewhere between a small loss and breakeven”.

The positive update also lifted other airlines in the sector, with EasyJet (LON:EZJ), IAG (LON:ICAG) and Wizz Air (LON:WIZZ) all closing with gains.

Miners in the UK were strong as metals prices jumped, especially copper, which was said to have benefited from hopes of increased demand in China for rebuilding infrastructure after the heavy floods, which have also raised supply concerns given the flooding has centred around the transport hub of Zhengzhou.

Antofagasta (LON:ANTO), Anglo American (LON:AAL), Glencore (LON:GLEN), Rio Tinto (LON:RIO), and BHP (LON:BHPB) were all trading towards the top of the blue-chip index.

In FX markets, GBP was relatively strong with GBP/USD moving back above 1.3800 as fears of the Delta variant slowing the economic recovery appear to be subsiding. Case numbers in the UK are continuing to fall and the doomsday scenarios some scientists were predicting last week now appear some way off.

The seven-day average number of daily coronavirus cases in the UK stands around 32,000, down from around 45,000 in the previous week.

Despite the improving situation in the UK, there are still fears that rising cases across the globe could impact the oil demand recovery. A White House official told Reuters on Monday that the US will not be lifting existing travel restrictions “at this point” and there are fears that Delta variant could have a more devastating impact in some of the states with a lower vaccination take-up. Last week, the US CDC’s Rochelle Walensky said the US is now experiencing a “pandemic of the unvaccinated”.

WTI and Brent Oil Futures were therefore trading lower, also weighed on by the latest Commitment of Traders report from the CFTC. Speculators cut their net long position in Brent and WTI in the latest week, WTI to the lowest net long position since May and Brent to the lowest net long since November 2020.

Elsewhere in the commodity sector, Arabica Coffee Futures touched a seven-year high on Monday after a 30% rally in the latest week. The rally stems from unusually cold temperatures in Brazil, which has been hit with two large frosts in less than a month and is expected to impact coffee supply going forward.

The biggest moves of the day came in the cryptocurrency space with Bitcoin and other major cryptoassets surging on Monday morning. The crypto sector has been supported by an job advertisement from Amazon for a ‘Digital Currency and Blockchain Product Lead’, which some have taken to believe that the internet giant will start accepting payment in Bitcoin and cryptocurrencies in the near future. A source later told London-based financial newspaper City AM that Amazon is looking to accept Bitcoin payments “by the end of the year”.

Ethereum, Cardano and Bitcoin Cash will be next in line before they bring about eight of the most popular cryptocurrencies online,” the source added.


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FTSE 100 finishes broadly unchanged, GBP/USD higher, Bitcoin approaches $40K

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