MARKET WRAP: FTSE tumbles below 7,000, USD strong, crude lower

imageEconomy9 hours ago (Sep 17, 2021 16:35)

© Reuters.

Key Points

  • FTSE 100 closing price of 6,962, -0.9%
  • Miners weigh on FTSE
  • Airlines rally as travel rules eased
  • USD higher ahead of Fed
  • Brent falls below $75/barrel
  • Cryptocurrencies steady heading into the weekend

By Samuel Indyk – The FTSE 100 declined on Friday amid a global sell-off that also saw Wall Street open lower. Improving US data has put fear into the minds of some investors that the Fed’s QE programme may begin winding down sooner rather than later, although the chance of a tapering announcement at next week’s meeting remains slim.

Miners were lower as problems in China continue to weigh on metals prices in the Asian economy. The Evergrande (HK:3333) situation has seen other property developers bonds sell off, harming their ability to finance new projects. Iron ore prices have declined by as much as 45% since July and the lower price is hurting the mining sector. Anglo American (LON:AAL), BHP Group (LON:BHPB), and Rio Tinto (LON:RIO) were some of the worst performers in London.

The best performing stocks in the UK were those related to the travel sector with airlines such as IAG (LON:ICAG), EasyJet (LON:EZJ) and Wizz Air (LON:WIZZ) all posting solid gains again. The UK Transport Secretary Grant Shapps announced on Twitter (NYSE:TWTR) that he will introduce measures to simplify international travel today.

Expectations are for the traffic light system to be scrapped for a two-tier system, plus lower requirements for testing upon arrival in England.

The US Dollar Index hit a three-week high on Friday amid recent strong data from the US which brings the Fed’s tapering timeline back into view. GBP/USD fell to its lowest level since September 8th after breaking trendline support to the downside.

Brent crude futures edged back below $75/barrel and WTI back below $72/barrel, however, both benchmarks are heading for weekly gains as the fallout from Hurricane Ida is continuing to hamper oil production in the Gulf of Mexico.

Cryptocurrencies were mostly steady heading into the weekend. Bitcoin recently formed a key technical pattern known as a Golden Cross, where the 50-day moving average moves above the 200-day moving average. The pattern is meant to signal an end to the downside trend and some are viewing it as the catalyst for another push towards $50,000.


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MARKET WRAP: FTSE tumbles below 7,000, USD strong, crude lower

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