Spreadex Market Update

FTSE sinks below 6900, cable at 2 month low as bad Friday turns bloody



Oh boy. It looks like Friday is going to be memorable for all the wrong reasons, with Europe’s losses getting worse and worse in anticipation of a likely awful US open.

It says something that, having shed 1.6%, the FTSE was one of the better performing major indices, even if that plunge takes it the wrong side of 6900 and to a brand spanking new 7 month nadir. While it was red across the board, RBS was one of the key contributors to the UK index’s decline, with investors sending the bank more than 4% lower following its warnings over the ‘uncertain economic outlook’.

What makes the FTSE’s slump extra-notable is that it comes alongside sterling’s own collapse. Normally the index and currency have an antagonistic relationship; however, this week they have been singing the same solemn tune. Cable slipped another 0.2% to sit at a sub-$1.28, 2 month low; against the euro, meanwhile, the pound was also down 0.2% and at its worst price in just over 3 weeks.

Yet it was the Eurozone where the morning’s losses were at their most pronounced. The DAX dropped 2%, ducking under 11100 to return to a 22 month low, with the CAC slipping 2.3% as it neared 4900.

Turning to the US open and it, somewhat predictably, looks like it could be carnage. The futures have the Dow Jones losing another 300 points when the bell rings on Wall Street, the sentiment-souring updates from Alphabet (directly) and Amazon (indirectly) leaving the index a smidge above 24650. What could change things, however, is the pre-open glimpse at the US Q3 GDP reading; though, given it is set to fall from 4.2% to 3.3% (at the annualised rate) quarter-on-quarter, the figure might just make matters worse.

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