Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

MARKET WRAP: FTSE slides, USD rallies as US yields hit 2-year highs

EconomyJan 18, 2022 16:29
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Key Points

  • FTSE 100 closing price of 7,566.2 (-0.6%)
  • US 10-year yield hits two-year high
  • Unilever declines for second day
  • Energy names rally as oil pushes higher
  • USD benefits from higher yields; GBP, EUR slip
  • UK unemployment declines, real wage growth stagnates
  • Bitcoin edges lower

By Samuel Indyk

Investing.com – The FTSE 100 declined on Tuesday as rising yields in the US again weighed on stocks across the pond. The United States 10-Year yield jumped above 1.85% briefly on Tuesday morning to its highest level in two years which weighed on major indices in the US. At the European close, the Nasdaq 100 was down 1.9% and the Dow Jones down 490 points.

Unilever (LON:ULVR) was a notable underperformer in the UK for the second consecutive day after news emerged that the Dove soap maker has had three offers rejected for GlaxoSmithKline's (LON:GSK) Consumer Health unit, a joint venture with Pfizer (NYSE:PFE). The reaction to a potential deal in the City and from Wall Street was not the most positive with some analysts expecting a deal of £60 billion might be needed to tempt GSK into selling the unit.

Energy stocks in the UK were trading higher after WTI and Brent crude continued to rise, with both benchmarks hitting their highest level in more than seven years. A Houthi attack on the United Arab Emirates helped trigger some of the gains amid fears that the instability in the region could damage a supply picture that already looks fragile. Meanwhile, Goldman Sachs (NYSE:GS) said they expect oil prices to breach $100/barrel this year as OPEC spare capacity drops to historically low levels.

Royal Dutch Shell (LON:RDSa) and BP (LON:BP) traded near the top of the FTSE 100 while smaller cap names such as Tullow Oil (LON:TLW) and Energean (LON:ENOG) also traded higher.

The USD dollar benefitted from higher yields with GBP/USD dropping below 1.3600 and EUR/USD back below 1.1350.

The UK labour market data released in the morning was mixed and had little impact on the pound. Total employment grew by 60K in the three months to November, less than forecast. The unemployment rate dropped to 4.1% from 4.2% while average earnings excluding bonuses increased by just 3.8%.

“For the first time since July 2020 wages actually fell in November if you take into account blistering inflation figures,” writes AJ Bell Financial Analyst Danni Hewson. “How does this shift impact the Bank of England’s thinking? Spiralling wage growth and a booming jobs market played into their decision making to increase rates in December.”

Bitcoin edged lower as the world’s largest cryptocurrency continues to trade in the $40,000-$45,000 range.

In the UK, the government announced it would be clamping down on misleading cryptocurrency adverts and bringing in the Financial Conduct Authority with crypto ads brought under existing rules governing financial promotions.

“News of the rule changes comes at a timely moment, given that the value of Bitcoin has dropped by 38% since its all-time high of over $68,000 in November,” said Hargreaves Lansdown Senior Investment and Markets Analyst Susannah Streeter.

“The rollercoaster ride is set to continue given that crypto assets are also highly sensitive to the fortunes of the stock market and were propelled higher in an era of ultra cheap money.

“As speculation swirls about how rapidly central banks will tighten mass bond buying programmes and start raising interest rates, given soaring inflation, they are likely to stay volatile.”

------------------------------------------------------------

Subscribe to Investing.com UK here

------------------------------------------------------------

MARKET WRAP: FTSE slides, USD rallies as US yields hit 2-year highs
 

Related Articles

Stocks tumble on growth concerns, bond yields slip
Stocks tumble on growth concerns, bond yields slip By Reuters - May 24, 2022 1

By Herbert Lash and Lawrence White NEW YORK/LONDON (Reuters) -Shares slid worldwide on Tuesday as supply chain woes and surging costs hurt corporate earnings and manufacturing...

WHO donors agree to fix 'rotten' funding model
WHO donors agree to fix 'rotten' funding model By Reuters - May 24, 2022 1

By Emma Farge and Jennifer Rigby LONDON (Reuters) - World Health Organization members formally agreed on Tuesday to a plan to overhaul its funding model which has been described...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Adolf Hitler
Adolf Hitler Jan 18, 2022 16:55
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email