Will BOE Speakers Dent FTSE Recovery Rally?
FTSE Pushing Higher
The FTSE continues to recover higher today as traders await key commentary from the BOE this week. Catherine Mann of the MPC will speak later today ahead of BOE’s Greene, Pill and Lombardelli who speak on Thursday, alongside BOE governor Andrew Bailey. Mann is among the most hawkish in the MPC having voted for a hike at both the July and September meetings. Greene and Pill should land on the hawkish side too while Bailey and Lombardelli are more neutrally placed, making them key swing voters to monitor. Ahead of this raft of commentary this week the market is currently pricing in around .36% of tightening by year end, suggesting the likelihood of just one further BOE hike this year. The key question for traders now is whether the BOE is likely to move in November or wait until December.
Lower Oil Prices Boosting Markets
Despite expectations for further tightening from the BOE, UK asset prices are rising on Tuesday amidst a broad rally in global stocks as traders cheer lower oil prices. Energy markets continue to drift lower this week as focus settle son improving global supply levels driven by the rebound in output from the Middle East. With outflows from the region now back at pre-war levels and the news on Friday that G7 countries will release a combined 100 million barrels from emergency energy reserves. Against this backdrop, the FTSE should continue to lift further unless we hear anything firmly hawkish from BOE members this week.
Technical Views
FTSE
The sell off in the index has stalled for now into the 10,456.6 level with price now bouncing higher again. While that support holds, focus is on a retest of the broken bull trend line and a return to the YTD highs around the 11k mark. Below there, however, deeper support at 10,120 will be the next bear target to note.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% and 73% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.