Greater London, England -- (SBWire) -- 11/09/2010 -- Joshua Raymond of spread betting provider City Index (http://www.cityindex.co.uk) commented on 3rd November:
“Trading in Europe was particularly quiet on Wednesday as traders switched their gaze towards what the Federal Reserve intend to do to get the US economy back on track.
Aside from those investors out there willing to take a bit of a punt on what may occur from the conclusion of the Fed’s meeting this evening, many traders have been sitting on the sidelines, with some taking positions off the table as a precaution against what may happen tonight.
There is an air of anticipation with exactly how much liquidity the Fed plans to inject into the US economy tonight. Most estimates range from around the $500bn mark and investors are likely to pay close attention to the scale, speed and method of asset purchases intended.
Many key stocks on the FTSE 100 rely heavily on operations that are either directly or indirectly impacted by the strength of the US economy and so naturally the eyes of many UK traders are on the Fed tonight. Moreover, there is likely to be a big impact on the strength of the US dollar, whose recent heavy weakness has helped to surge the prices of dollar denominated commodities such as Copper and Crude Oil, which has put the wind in the sails of many heavyweight energy and mining stocks in Europe recently.
Many traders may feel that there are heightened risks to the downside from what could come from the Fed tonight, particularly with the FTSE 100, Dow Jones and S+P having rallied 14% since the start of September, mostly on the optimism of a second round of quantitative easing from the Fed.
Today’s session has been quiet therefore with very tight trading ranges on the FTSE 100 Index. The UK Index has endured a choppy session as traders bought into some of the key UK banks such as Lloyds and Standard Chartered, but also sold out of energy firms and the miners. Lloyds shareholders gave the company a vote of confidence today after the UK bank announced that it had hired rival Santander’s UK head Mr Horta-Osorio to become its new CEO. The banks shares rallied 3% to the top of the FTSE leaderboard.”
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Spread Betting News: Trading Quiet As Spotlight Heads Towards the Fed
The financial spread betting experts at City Index provide a daily commentary on the financial markets. Here, Market Strategist Joshua Raymond casts his eye over developments on 3rd November.