Market Comment 25/06/16

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The FTSE has seen decent strength in recent days off 6100 support zone at 6260 at time of writing, despite Marks & Spencer’s results this morning failing to meet the market’s expectation, trading down 8% this morning. The move higher in the FTSE has coincided with a rise in GBP/USD up to 1.4650 (from a low of 1.3850 this year) implying the move is driven by an unwinding of the “risk of Brexit trade”. Arguably the majority of this risk has come out of the market now as we near the beginning of June.

On the commodities front, gold has suffered on the back of increased odds of a rate hike in the US next month, from $1300 resistance zone recently to $1225 this morning. This theme is backed up by US T-Notes, in which the front month trading at the lows (highest yields) of the month so far. Base metals have largely followed suit with gold, moving large cap UK mining companies to key support areas – a good example is Rio Tinto at £19-20. Meanwhile oil has shown continued strength, the July WTI Crude contract trades close to the significant $50 ceiling at $49.30

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