CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

FTSE recovers as Wall Street opens higher

Article By: ,  Senior Market Analyst

The FTSE spent the morning in the red amid concerns of a US government shutdown. Not even strength from the miners, a flurry from the housebuilders and a weaker pound was able lift the depressed mood on the FTSE. Only a stronger start from the US encouraged the UK index to move into the black.


As if the markets haven’t had enough to deal with this year. Fortunately, the prospects of a US government shutdown hasn’t proved to be the straw that breaks the camel’s back. European equities traded lower, whilst the dollar moved higher versus its peers expect the safer haven the Japanese yen. This shows that another key risk adding to the already long list of risks is sending traders searching for cover in safer havens. Wall Street then opened higher as concerns eased.

The dollar was trading higher versus a basket of currencies, despite a hattrick of misses on the data front. Supported by the risk off environment the dollar hit a peak of 96.72. US GDP slipped down to 3.4% from 3.5% increasing concerns over an economic slowdown. US durable goods orders grew just 0.8% missing expectations of 1.6% and inflation increased just 0.1% month on month in November, less than the 0.2% expected. Under usual circumstances these data points would have sent the dollar tanking; this shows the level of concern that there is over a potential shutdown 

Data Dampens Mood For Pound
Pound traders digested a mixed batch of data on Friday. Consumer confidence weakened to -14 in November, down from -13 the previous month, despite the improving economic position Wages have been on the increase and inflation has been falling, which should increase consumer confidence. Instead sentiment dropped to its lowest level since 2013 as consumers fret over what the next 12 months hold in store. Brexit uncertainties have resulted in consumers assessment of the coming year to deteriorate to levels last seen following the Brexit referendum.
Weak consumer sentiment in addition to lacklustre UK GDP data and public sector net borrowing at its lowest November level since 2004 kept the pound bears in control. Not even weakness in US PCE numbers could knock the dollar strength. 

Bitcoin’s Santa Rally 
Whilst Santa gave the financial markets a wide berth, he hit Bitcoin head on. Bitcoin was on track for a 20% jump across the week as investors appeared to be pulling out of equity markets and moving into crypto currencies. Whilst digital currencies had fallen across previous weeks amid regulatory concerns, they were experiencing the closest think to a Santa rally in the markets.


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024