FTSE flat as Italy and Iran dominate focus
London traders returned to their desks for the first time since the festive period, but volumes remained thin as many traders and fund managers were absent, enjoying an extended break during a traditionally quiet and slow week for investment markets.
Italy was able to conduct a relatively successful auction of new short dated debt, the yields on both six month notes and two year bonds were much lower than recent auctions or the secondary market had been trading at. It is yet to be seen whether the ECB’s latest attempts to ‘bribe’ European banks in to lending to under stress Euro-zone nations will work, but this was certainly a positive.
Most eyes will be on Italy’s auction of 10 year debt on Thursday and whether similar success can be achieved, but with little else in the way of noteworthy news at either a corporate or economic level shares were initially chased higher. Momentum was lost during the afternoon though; the FTSE 100 which had gained over 40 points by late lunch eventually closed 5 points lower at 5507, shifting 15 points in the last five minutes of trading.
Elsewhere oil was in focus, following the threat from Iran to close the Strait of Hormuz, a vital link from many Gulf nations for oil tankers moving oil out of the region via the Indian Ocean. Almost a fifth of the world’s oil is transported via the strait, but a rebuke from the US Navy that they would not tolerate such action meant that the price of Brent Crude stayed relatively static at $108.5.
This was posted in Bdaily's Members' News section by John Dance .
Enjoy the read? Get Bdaily delivered.
Sign up to receive our popular morning National email for free.