The divergence between FTSE and pound became even starker this Tuesday morning, each instrument lurching towards fresh highs and lows respectively.
Romping forth by 110 points the FTSE 100 is now on its way 7100 (and, perhaps, its all-time peak); even more importantly the FTSE 250, a better indication of the health of British businesses, is at a new high, suggesting the pound’s plunge isn’t the only thing that has sent the indices roaring into life. For the construction PMI has joined its manufacturing (and likely services) brethren in exceeding analysts’ expectations, the sector leaping out of contraction territory to hit a half a year high of 52.3.
While the FTSE soars, however, sterling is looking increasingly sickly. Instead of finding the bottom the pound has sunk past the nadir struck in the fortnight following the Brexit vote, and is now circling the drain at 31 and 3 year lows against the dollar and euro respectively. It is a glaring reminder of the trend that has been in place since the referendum result was announced, with the FTSE focused on the present and the pound, arguably, looking to the future.
Elsewhere the DAX and CAC have felt some run-off goodwill from the FTSE’s rise, both despite the euro’s Brexit-boosted strength and because of Deutsche Bank’s mild rebound. The Dow Jones currently looks slightly less likely to join in with the fun, the futures pointing to a 0.1% increase after the bell.