British currency regains ground after government decision to abandon its tax cut plan
Caution prevails at the start of the last quarter of the year, after a month of September that was the worst in decades for stock markets around the world. In addition to inflation and the fear of a recession, investors are faced with new fronts that they will try to tackle to reverse the downward trend of recent weeks.
These include the upward reaction in oil prices just days before the expected OPEC meeting, in which member states could announce a sharp cut in production to halt the price decline seen in recent months.
Given this perspective, the Brent-type barrel, a benchmark in Europe, rose more than 3% to recover $87, while the US West Texas rose to $82.
Awaiting the meeting is the absolute lead of the day for the UK market, after the government of Liz Truss has been forced to backtrack on its plan to cut taxes on high-income earners in the country. A decision last week that caused major tensions in the markets and a real collapse of the pound at its crossroads with the rest of the currencies, forcing even the Bank of England to intervene in the market.
After the Executive’s withdrawal, the market reaction was swift and the pound bounced back to its week-long high of $1,128.
Against this background, the Ibex-35 extends its downward trend by 0.5%. However, he manages to hold on to 7,300 points. And we’ll have to wait for Wall Street to open to see if the reds consolidate.
Against this background and in anticipation of the numerous open fronts, the Ibex-35 is extremely cautious with Amadeus (-2.71%), Meliá Hotels (-2.25%), BBVA (-2.01%), Inditex ( -1.97%) and Aena (-1.92%) led the declines. On the other side were Repsol (-1.5%), Cellnex Telecom (+1.13%), Enagás (+0.25%) and Indra (+0.13%).
Investors are also closely following the evolution of Credit Suisse’s price, which plunges by more than 9% after an intense weekend in which rumors of the possible bankruptcy of the entity, a giant in the investment banking sector, were constant.
The company’s own CEO, Ulrich Koerner, has admitted that Credit Suisse is in a “critical situation”, although he has also defended its liquidity and solvency capacity in the current environment. Despite this, the company’s so-called CDS (credit default swaps) are at levels not seen since 2009, in the midst of the financial crisis. Investors buy this type of product to protect their position against a possible bankruptcy of the underlying entity.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
