FTSE perks up after initial dip

The FTSE proved surprisingly resilient this morning, first plunging on opening but then moving higher despite a slew of negative news from the UK’s blue chip.

The FTSE proved surprisingly resilient this morning, first plunging on opening but then moving higher despite a slew of negative news from the UK’s blue chips and the launch of a money laundering investigation into Dutch bank ABN AMRO. 

Shares in publishing house Pearson sank over 16% after the company warned it expects lower profits from US education literature. British Airways parent International Consolidated Airlines and tobacco firm Imperial Brands also dropped in early trade, 3% and 9% respectively, following profit warnings from both companies. 

IAG echoed some of the issues that led to the demise of the Thomas Cook travel company earlier this week but pointed the main finger of blame at pilot strikes which cost the company EUR137 million. 

But this is relatively mild compared to the troubles of ABN AMRO which is now being investigated for financing of terrorism and money laundering. In a similar case last year Dutch peer ING was found guilty and fined EUR775 million. 

On the FTSE, banks, telecoms, retailers and resources companies are providing some counterbalance to the beleaguered Pearson and IAG while some support is coming from positive noises from China about the Sino-US trade relations. 

Pound lower with clock ticking on Brexit

The pound is a touch weaker a day after Parliament has gone back into session following the Supreme Court’s ruling that the prorogation was illegal. Apart from the bile exchanged among the MPs it is not clear how things will move forward on the Brexit front. The ball it seems is in the Prime Minister’s court and speculation about what Mr Johnson will do next ranges from resigning to shutting down Parliament one more time. 

The euro is holding against the dollar but is beginning to slightly weaken after the unexpected resignation of a senior member of the European Central Bank. The decision could spell trouble ahead as Sabine Lautenschläger, one of the bank’s six-member executive board, decided to leave in a policy dispute over the ECB’s September decision to restart a massive bond-buying programme. 

Disclaimer: The information on this web site 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. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account