Footsie heading for the biggest weekly gain since 2008.

2nd December 2011

Ian Copelin, Investment Director, my wealth, comments “UK equities have climbed again this morning, with the FTSE-100 currently (11.15am) up 80 points or 1.46% – extending its largest weekly rally since November 2008.  The FTSE-100 is currently up just over 400 points or 7.8% on the week, after six central banks (including the Bank of England) agreed to lower interest rates on US dollar loans, which should encourage lending between banks and boost lending to households and businesses.

This was a very big and positive coordinated move, as the inability of banks to access funds in the market had clearly become very stressed and was a key area of concern for the market.

The market has also been helped by China’s decision to cut its reserve ratio for banks by 50 basis points, coupled with better-than-expected US manufacturing growth (growing at the fastest rate for 5 months) and consumer confidence (the index increased to 56.0 from a 40.9 reading and an expected reading of 44.0) and a rally in French and Spanish bonds.

The German Chancellor, Angela Merkel, also repeated her wish to rework the euro area’s rules over budget monitoring, while the French President, Nicolas Sarkozy, called for more discipline and penalties for countries that break fiscal rules.

All eyes are now on US payrolls and unemployment data, due at 1.30pm (UK time) today.  According to the median forecast from 90 economists, the Labor Department report may show payrolls climbed by 125,000 in November after rising 80,000 in October, leaving the jobless rate at 9.0%.”