What prevents the FTSE 100 from growing

03.08.2018 / 13:18

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FTSE 100 should outperform other European indices due to weak pounds and defense exposures. However, its positive correlation with commodities is likely to limit profits.

Capital funds in the UK continue to have "significant liquidations," but currency conditions should support FTSE 100. GBP / USD is at the lowest levels in 11 months, and weak pounds are often the cause of an FTSE 100 .

The 30-day correlation with the FTSE 100 and the cable is insignificant, suggesting that the weak pound does not reflect as in the past benchmark. Energy and materials cover over 25% of the FTSE 100, and the positive relationship with the Bloomberg Commodity Index is at its highest levels for almost three years. With Brent dropping by more than 7 percent and sinking industrial metals and the weak commodity complex will likely continue to hamper the progress of the FTSE 100.

Source: Bloomberg Finance L.P.

Chart: Used with permission of Bloomberg Finance L.P

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What prevents the FTSE 100 from growing

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