FTSE Mib joins 1 year high club

Is there more upside to come?

Over on mainland Europe Italy’s FTSE Mib was the only index showing any real signs of life. The Italian benchmark soared across the session, boosted by its banking sector. Italian banking stocks were firmly in favour after the Italian government convinced the European Commission that the new measures that it submitted this week will help to bring its growing debt in line with fiscal rules.

 A relief rally on the back of Italy avoiding disciplinary action over the state of its public finances has lifted the banking sector 3%, taking FTSE Mib into the 1-year high club.

The 3% rally for the sector comes following a 5% gain in the previous session, as among other factors, investors reacted to Christine Lagarde taking the helm at the ECB. Christine Lagrde is seen as the continuation candidate following Mario Draghi and is expected to adopt an accommodative stance to monetary policy. Her appointment removes the risk of a known hawk stepping in.

Factors are certainly aligning for the FTSE Mib, yet whilst there is all good new for now, Italian troubles will almost certainly resurface in Autumn 2020 when the draft budget must be submitted.

Levels to watch:

The FTSE Mib is trading above ts 50, 100 and 200 sma indicating bullish momentum. 

Resistance can be seen at 22270, prior to 22850 and 23465. On the downside the index could find support at 21215 prior to 20350 and 19550.

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