FTSE breaks higher on dovish BoE
Fawad Razaqzada September 19, 2019 8:38 AM
Following the BoE’s policy announcement earlier, which was deemed to be more dovish than anticipated, the pound dropped and this helped to lift the FTSE to a fresh high for the week after the index had spent several days in consolidation. The BoE echoed the views of several other major banks which have provided similar views or even more dovish outlook on their respective monetary policies i.e. global interest rates will remain at or near record low levels for the foreseeable future. For that reason, equity indices continue to remain supported, keeping the bears at bay despite raised geopolitical tensions and concerns over global demand hurting company earnings.
Speaking of geopolitics, the FTSE was also supported by rising shares of oil majors which tracked crude prices higher. Raised geopolitical tensions continue to support oil prices at the moment, even if Saudi Arabia’s crude output could return to normal sooner than expected. But following Saturday’s attacks, investors have realised that production even in Saudi is at risk of outages due to rebel fighting or terrorist activity — something which looked almost impossible last week. This is why oil prices have been hesitant to quickly close their gaps created at the open this week.
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