FTSE points higher as curfew expected
Fiona Cincotta September 22, 2020 2:29 PM
After yesterday's bloodbath, stocks are pointing ahead of Boris Johnson's curfew details
The FTSE looking to claw back a few points on the open after experiencing its worst sell of since June in the previous session, amid a selloff in two separate sectors.
Yesterday we saw the return of the covid trade, the steep selloff travels stocks and hospitality tocks in the face of tougher restrictions for longer. We expect these sectors to remain under pressure whilst Britain moves through the more dangerous Autumn and Winter periods.
The US also saw a steep sell off overnight. However, managed to close well above session lows thanks to a rebound in tech stocks. The Nasdaq even managed a close in positive territory, however Asia stuck to the negative tone with travel and tourism particularly under pressure. Still European futures are heading for a slightly positive start.
The Pound came under pressure in the previous session as investors weighed up the economic impact of the risks to the UK economy. Tighter restrictions and potential negative rates leave little for the Pound to cheer. Whilst Boris Johnson’s speech could impact sterling, an appearance by BoE’s Governor Andrew Baily could direct the Pound in the near term. Andrew Bailey could use this as a chance to clarify the central bank’s thinking over negative rates following an admission last week that the BoE is heading in that direction.
Powell & Mnuchin promoting stimulus?
In the US session attention will be firmly on Fed Reserve Chair Jerome Powell & Treasury Secretary Steve Mnuchin as they appear before the Hose and Senate. Both players are expected to press Congress for additional fiscal stimulus, after the Republicans and Democrats have failed to agree to additional stimulus since the expiry of the $600 unemployment benefit top up in July.
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