FTSE 100 falters, Cable back below 1.40, Bitcoin tumbles By Investing.com

By Samuel Indyk

Key Points

• FTSE 100 has worst day since September
• Hawkish Haldane supports gilt yields
• Cable back below 1.40 as USD strengthens
• Bitcoin falls over 6%, back below $50,000

Investing.com – The FTSE 100 had its worst day since September 21st as higher global yields continue to spook equity markets. Nearly all the companies in the blue-chip index were lower, with Rightmove PLC (LON:RMV) the worst performing after their earnings report pre-market. Full-year revenue was down 29% in 2020 with operating profit down 37%. However, despite the poor year in 2020, the company said they were confident in the resilience of the business heading into 2021.

The best performer in the index, and one of the only shares to trade in the green was British Airways parent IAG (LON:ICAG), who also provided a trading update pre-market. Despite the company announcing a 69% decline in revenue and reporting their biggest ever loss, people appear optimistic that the company can benefit from a reopening of the global economy as air travel starts to resume.

Bond Yields

The bond sell off in the UK was nowhere near as large as recent days with the United Kingdom 10-Year up just 1 basis point to around 0.8%. The Bank of England’s Chief Economist Andy Haldane was relatively upbeat, maintaining his recent hawkish tone. Haldane said that risks to inflation are skewed to the upside, rather than being balanced. He added that monetary policymakers may be required to act more assertively than is currently priced into financial markets.

FX

GBP had weakened against the USD with GBP/USD dropping below 1.39 at one stage, having been as high as 1.42 earlier in the week. The hawkish comments from Bank of England’s Haldane stopped the rout in the pair and GBP/USD moved back above 1.39.

Bitcoin and Commodities

Gold was lower again on Friday as the yellow metal broke below $1,700 and is heading for its worst monthly loss since 2016. For the month, gold is down over 6.5% which is the worst month since November 2016 when prices fell 7.2%.

Bitcoin was heading for its worst week since March last year after falling around 6%. “When flight to safety mode is on, it is the riskier investments that get pulled first,” Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.