UK Stocks Eye Record Close As Slumping Pound Boosts Equity Bets

So on Thursday, the FTSE got a nice boost from the slumping pound, which dove after the BoE “succeeded” (whatever that means in this context) in pulling off a dovish hike.

In fact, the hike was so dovish that 5-year gilt yields fell the most since August 2016, which was when the BoE cut rates following Brexit.

Uk5Y

Well fast forward to Friday and the FTSE is set for a record close, building on Thursday’s gains as the pound holds losses:

FTSEPound

Remember, three-quarters of the sales of FTSE 100 constituents come from abroad and on Thursday, the 40-day correlation between the FTSE and the pound turned the most negative ever.

So thanks Mark Carney! By telegraphing a one and done, you’ve given the green light for everyone to pile in to UK stocks at a time when no one even knows what the country’s future is in the world.

FTSE

 

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3 thoughts on “UK Stocks Eye Record Close As Slumping Pound Boosts Equity Bets

    • Yeah and the chart shows just 4-day. You could make your own 2 charts from any charting s/w and then put them together as I don’t think even a bloomberg terminal shows this one alone. Determining whether it’s the most negative correlation ever would take more effort.

  1. Ok, but remember to hedge the currency before buying the corresponding market. Whether it’s the FTSE, DAX, Dow, Nikkei, etc. The question is, hedge against what?..Currencies are in a race to the bottom and taking turns at leading then lagging in that dubious war. The dollar was handily “winning” the devaluation for the first 8+ months of this year but lately has been “losing” the currency war. Trump will get pissed.

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