Market News & Analysis
FTSE Volatile Amid OECD Warning vs Central Bank Support
Fiona Cincotta March 3, 2020 1:58 AM
Yet Wall Street has focused on the prospect of the Fed loosening monetary policy, leading the index to surge 1% on the open and drag European indices off their lows.
The FTSE is fairing relatively well, back in positive territory, compared to its German counterpart, which remains firmly in the red. There are a few reasons for this.
Firstly, Germany is an exporter nation so the economy could take a harder hit in the case of a global recession.
Secondly, the euro has soared in recent weeks and extended those gains by 1% today. The unfavorable exchange rate is another hit for German exporter firms.
Meanwhile, the FTSE found some support from a weaker pound. Sterling dropped below $1.28 as UK manufacturing activity slipped dipped to 51.7, down from 51.9 in January and as the Bank of England pledged to take all the steps necessary to protect stability in the UK economy.
With the number of cases in the UK ramping up by the hour, the UK is on the cusp of a possible explosion in the number of coronavirus cases. These fears are more evident in the FTSE250, the more domestic focused index, which remains 0.3% lower, despite the uplift in the internationally focused FTSE 100.
Levels to watch
Despite the uptick of 0.4% today, the FTSE remains firmly below its 50, 100 and 200 sma. It has broken through trend line support with strong bearish momentum still intact.
Immediate support can be seen at 6447 (last week’s low). Immediate resistance can be seen at today’s high 6767.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.