MARKET WRAP: FTSE falls, oil slips lower, Ethereum reaches record high

imageEconomy17 hours ago (Oct 29, 2021 16:06)

© Reuters.

Key Points

  • FTSE 100 closing price of 7241.1, -0.1%
  • Natwest falls after earnings
  • EUR retraces Thursday’s gains
  • Oil slips ahead of OPEC+ meeting
  • Ethereum reaches record high

By Samuel Indyk – The FTSE 100 slipped lower on Friday but still ended the week with slight gains amid a week with a barrage of earnings.

Today’s company in focus was NatWest (LON:NWG), who reported earnings pre-market. Total income increased 14.5% to £2.8 billion in the third quarter. The company also released £242 million of provisions that were previously set aside. However, the company put aside £294 million to pay for litigation issues related to a breach of money laundering regulations.

“A lot of attention’s being given to the money put aside to pay for money laundering regulation breaches,” said Hargreaves Lansdown (LON:HRGV) Equity Analyst Sophie Lund-Yates. “Clearly this kind of issue is unsavoury, and with the PPI scandal only just disappearing in the rear-view mirror, it’s uncomfortably common. However, a longer-term problem is lower yielding loans which have hurt the all-important net-interest margin.”

In FX markets, EUR/USD retraced the gains seen during Thursday’s session in the wake of the ECB decision. Lagarde appeared to push back against expectations of an early interest rate hike but the EUR still rallied anyway, however, the move has now been retraced.

Focus is now turning to the key central bank decisions next week from the Bank of England and FOMC. The Fed is likely to announce a slowdown in the pace of asset purchases while there is a split on what the BoE might do. Markets are pricing a 15 basis point hike to 0.25%, however, most analysts don’t expect the central bank to increase the Bank Rate at this juncture.

GBP/USD was trading lower on Friday amid broad USD strength.

WTI and Brent crude prices declined on Friday and were set to end the week with losses ahead of next week’s OPEC+ meeting. The cartel is not expected to increase output by any more than the 400,000 barrels per day that is already planned. Commentary from officials this week has suggested that the group needs to be careful in reversing production cuts given the uncertainty of the pandemic and the potential impact on demand.

Major cryptocurrencies were mixed with Ethereum hitting a new record high above $4,400 while the dog-based cryptocurrencies, SHIBA INU and Dogecoin, are now lower over the last 24 hours. Bitcoin has been relatively steady, trading in a narrow range around $61,000.


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MARKET WRAP: FTSE falls, oil slips lower, Ethereum reaches record high

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