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FTSE Holds Gains as Carney Confident in Economy

Mon, 9th Jul 2018

The FTSE 100 got off to a strong start this morning, gaining 38 points during the early hours of trading, after the Bank of England governor Mark Carney said that he was confident that the UK’s economy could bounce back.

The Dow Jones also opened strong, gaining 173 points during early trading in the first day back after the 4th July holiday. The markets had been weak on Tuesday, but recouped most of that slide on Thursday at the start of the session. Traders were, however, cautiously awaiting the release of the minutes from the FOMC meeting, as well as some data from the US Payrolls for June, and the start of the US tariffs on China, which will occur on Friday.

The FTSE 100 held strong above the 7,600 mark on Thursday, bucking expectations as the pound remained strong following some upbeat comments from Mark Carney, which started expectations of an interest rate hike.

GKFX senior market strategist David Morrison noted that the Fed Chairman Jerome Powell had sounded upbeat at his press conference, when he had reiterated that the US central bank was comfortable with inflation rising above the 2% target set by the Fed. He added that some have interpreted the Fed’s rate increases as being a positive response to the improving economy. However, there is also the view that the central bank is keeping a close eye on asset valuations, and that it could look to tighten monetary policy at any time if prices necessitate it.

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