- Summary:
- FTSE 100 rise over 1% in early trading after the Bank of England cut interest rates by 50 basis points to 0.25% and announced extra measures to combat the
FTSE 100 rise over 1% in early trading after the Bank of England cut interest rates by 50 basis points to 0.25% and announced extra measures to combat the coronavirus outbreak impact in th economy. The Bank of England surprised markets to cut rates ahead of the next policy meeting and ahead of the government budget announcement later today.
Bank of England will continue with gilts purchase target at £435 billion with the corporate bond target also left it unchanged at £10 billion. They also announce that they are easing the countercyclical buffer to 0% from 1% previously. The Bank also noted that will take all necessary actions to support the UK economy and financial system, consistent with its statutory responsibilities.
The interest rate cut from the Bank of England move is positive for the FTSE stocks and might provide the signal for some bottom fishing. Meanwhile the EURGBP jumped higher on the news and as of writing is 0.17% higher at 0.8750.
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FTSE 100 Analysis
FTSE 100 is 1.39% higher at 6042 attempting to recover some of the sharp losses the last four trading days. The technical momentum for the FTSE is bearish despite today’s rebound, and only a move above the 6500 mark can cancel the bearish momentum.
On the upside, first resistance for the FTSE stands at 6,088 the daily high. The next hurdle for the index is at 6230 the high from yesterday’s trading session. A break above might test the next supply zone at 6466 the high from March 9th.
On the other side, as investors focus is to lower levels, the first support for the FTSE stands at 5960 the daily low. If the index breaks below, the next support area is at 5929 the low from yesterday. A move below might pave the way for the low from March 9, at 5896.