Europe To Open Higher As BoE To Pump In £150 Billion & Biden Edges Ahead
Fiona Cincotta November 5, 2020 7:35 AM
BoE injects £150 billion & markets applaud election outcome (so far)
European stocks are looking to open broadly higher on Thursday after Wall surged overnight, even though the winner of the US Presidential election has yet to be declared and it could still be days until the winner is announced. Joe Biden has 264 electoral college votes versus Trump’s 214. However, Trump has requested recounts in several states and threatens legal action yet the US stock market surged.
Stocks on the FTSE are being supported after the Bank of England announced that it will pump an additional £150 billion into the economy as the UK goes into lockdown.
The central bank voted unanimously to keep rates on hold at 0.1%. The central bank also increased its QE programme by £150bln, more than the £100 billion expected. The pound breathed a sigh of relief; early morning rumours had suggested that the BoE was going to cut rates which had sent the Pound sharply lower.
FOMC no change expected
Looking Ahead the Federal Reserve interest rate announcement is due later today. This is unlikely to have much impact on the market, which remains heavily focused on the race to the White House. The data from the US over the past month has been resilient despite record numbers of new covid infections. The markets have been broadly steady and there is little reason for the Fed to make a move this month. US interest rates are expected to remain at these levels for the next few years and the Fed could well reiterate that message.
FTSE Chart
The FTSE is trading +0.5% and has pushed over its 200 sma on the 4 hour chart. It is targeting its descending trendline resistance at 5940, a move above here could negate the current bearish trend bringing 6000 round number into focus.
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.