Spreadex Market Update

Dominant dollar helps trash dour Dow Jones, FTSE only gets slight rub from cable-collapse



A dominant dollar helped lead to a seriously down in the dumps Dow Jones this Tuesday, while the FTSE lost its lunchtime momentum.

Though not quite as strong as analysts’ were expecting, the latest US retail sales figures were solid enough to give the dollar a hefty hawkish boost. The greenback was propelled 0.7% higher against the pound, with cable nearing sub-$1.348 2018 lows, while against the euro it was up 0.8%, forcing the single currency under $1.185.

This, combined with the USA’s ambassador to China Terry Branstad stating that the two countries were still ‘very far apart’ on the issue of trade, caused the Dow Jones to have an absolutely miserable time of it after the bell. The index plunged nearly 200 points as the session got underway, trudging back towards 24700 having almost grazed a 2 month high of 25000 on Monday.

Normally the sight of a cable-collapse would be like catnip for the FTSE. And yes, the UK index did manage to climb 25 or so points as the day went on. However, that the FTSE can perhaps feel aggrieved that it couldn’t wring more juice from sterling’s slide.

Beyond the bearishness plaguing the Dow Jones, the fact Brent Crude has pulled back from its $79 per barrel is potentially responsible for the index not fully taking flight; but even then, BP and Shell are still up around 1.5% apiece, showing investors are still willing to drink down the oil colossi even if the black stuff is off its 3 and a half year peak. Investors may simply have slight reservations about sending the FTSE much higher than it currently is, given that it the index didn’t last long at its 7800-teasing peak back in mid-January.

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