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MARKET WRAP: FTSE hits 2-year high, Oil rallies, Bitcoin steady

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Key Points

FTSE 100 closing price of 7,651.45 (+1.1%)
IAG outperforms as summer travel demand picks up
Oil rallies following inventory data
GBP steady, EUR up after ECB comments
Bitcoin steady below $45,000

By Samuel Indyk – The FTSE 100 rallied to a two-year high on Wednesday, boosted by travel & leisure stocks which continue to benefit from a recovery in travel demand.

British Airways parent IAG (LON:ICAG) led the way higher for the FTSE as data from the travel trends firm ForwardKeys showed summer holiday bookings were beginning to return to 2019 levels. The firm said summer bookings were just 16% below comparable level in January 2019.

In the FTSE 250, Tui (LON:TUIT), Wizz Air (LON:WIZZ), and easyJet (LON:EZJ) were some of the other best performing stocks.

Reports that Prime Minister Boris Johnson is considering dropping the legal requirement to isolate if you catch COVID helped domestic travel & leisure stocks with Cineworld, Stagecoach and National Express all trading higher.

WTI and Brent crude futures jumped after the weekly petroleum status report from the Energy Information Administration. US crude oil inventories declined by 4.75 million barrels in the latest week, compared with expectations of a build of 0.369 million barrels.

“At 410.4 million barrels, US crude oil inventories are about 11% below the five year average for this time of year,” the EIA said.

FX markets were generally quiet with focus turning to Thursday’s US inflation data. Consumer prices are expected to have increased 7.3% in January from a year earlier, which would mark the highest inflation reading since 1982.

The EUR was up marginally with EUR/GBP near a seven week high after comments from ECB officials. New Bundesbank chief Joachim Nagel told the German newspaper Die Zeit that the ECB could raise its interest rate this year. Bank of England Chief Economist Huw Pill said he was in favour of a “steady handed approach” when it came to a further tightening of monetary policy.

Bitcoin was steady after failing to make a clean break above $45,000. Despite risk appetite improving and stock markets rallying, Bitcoin has failed to build on the strong gains seen at the end of last week and during the weekend.

“Risk appetite has improved this week which has coincided with some profit-taking in Bitcoin,” OANDA Senior Market Analyst Craig Erlam said. “It continues to look promising though and a break of $45,500 would be another important and bullish hurdle.”


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MARKET WRAP: FTSE hits 2-year high, Oil rallies, Bitcoin steady

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