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MARKET WRAP: FTSE tumbles, ECB slows bond buys, GBP bounces back

Published 09/09/2021, 16:34
Updated 09/09/2021, 16:39
© Reuters.

Key Points

  • FTSE 100 closing price of 7023, -1.0%
  • EasyJet falls on capital raise plans, takeover rejection
  • 888 declines as it wins bid for William Hill’s European assets
  • GBP bounces back from 3-day fall
  • EUR soft as ECB slows pace of bond buys
  • Cryptocurrencies bounce after Tuesday’s carnage

By Samuel Indyk

Investing.com – The FTSE 100 fell on Thursday, underperforming its European peers, dragged lower by financials, miners, and airlines. EasyJet (LON:EZJ) was the worst performing stock in the mid-cap FTSE 250 as the company announced plans to raise £1.2 billion from shareholders as it continues to grapple with the impact of the pandemic.

Alongside the announcement, EasyJet also declared that they had received an unsolicited takeover approach from an unnamed bidder which was unanimously rejected as EasyJet set its significantly undervalued the company. Bloomberg later reported the London-listed, low-cost airline Wizz Air (LON:WIZZ) was the unnamed bidder.

Shares in 888 Holdings (LON:888) were also trading lower as the gambling group was confirmed as the winning bidder for William Hill’s European business for £2.2 billion. The unit was being sold by Caesars Entertainment (NASDAQ:CZR) following the takeover of William Hill earlier this year, with analysts initially expecting a bid well below £2 billion would have been enough to win the bid.

GBP was strong on Thursday with GBP/USD ending a streak of three consecutive days of losses after touching a two-week low on Wednesday. Focus was on comments from the Bank of England Governor Bailey on Wednesday who said half of the rate-setting Monetary Policy Committee felt minimum conditions had been met for considering an interest rate hike.

The EUR was mixed in the wake of the latest monetary policy announcement from the European Central Bank (ECB). The Governing Council judged that favourable financing conditions can be maintained with a “moderately lower” pace of net asset purchases under the emergency stimulus programme than in the previous two quarters. The move was not wholly unexpected which left EUR/USD broadly unchanged above 1.1800.

WTI and Brent crude futures were mixed as Gulf of Mexico oil production remains offline following Hurricane Ida. The latest data from the EIA showed US oil stockpiles decline by less than forecast in the last week. Crude oil inventories fell by 1.529 million barrels versus expectations for a decline of 4.612 million barrels. Gasoline inventories dropped 7.215 million barrels, more than the expected 3.390 million barrel decline. US weekly crude production declined by the most on record.

Natural Gas was choppy with futures trading above $5.00 per million BTU for the second consecutive day. Before that, the last time nat gas futures were above $5.00 was in 2014 in the middle of the Polar Vortex. Nat gas was higher despite the weekly storage data showing a larger than expected increase in gas in storage in the last week.

Cryptocurrencies were mostly higher with Bitcoin holding above its 200-day moving average for the most part. There was once again outperformance observed in Solana which trade above $200 for the first time. Other cryptocurrencies linked to Decentralised Finance (DeFi) applications, such as Cardano and Ethereum, were also trading higher.

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Latest comments

seems like the pound is going to push even higher..... and the usd is going to tumble
hi
hi
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