The FTSE is currently indicating a slightly higher opening, as traders are trying to understand the reason behind the no action move of the BOE. With high inflation and slowing GDP the UK economy is poised to enter into a period of stagflation, which would be disastrous to the FTSE and the GBP/USD.
A strike by Brazilian oil workers pushed oil prices higher by 4 percent. Oil also rose after Iran test-fired more missiles in the Persian Gulf and a Nigerian militant group said it will end a cease-fire this week. We believe that oil will finish the week above the 140 per barrel level. Gold made a break towards the 950 dollars per ounce level, but yet again got rejected before the precious metal was met with profit taking. Another crack at 950 is in the cards.
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