On the whole currency markets have started to stagnate, although, the risk that GBP/USD reaching 1.7000 in the short-term remains in place given the continued short squeeze in the market. However, even though the movement in the currency crosses has slowed the rhetoric from different central banks remains in place. Yesterday, it was the turn of the Bank of Canada (BOC). In their Monetary Policy Report the Governor was noted as saying that the strength of the CAD “is the major downside risk”. The CAD has appreciated over 20% against the US dollar so far this year. As such, key economies will continue to increase the pressure on both the US to act in a meaningful manner to restore confidence in the greenback, accompanies with China allowing the Yuan to appreciate.

Instead, of currency concerns yesterday investor’s attention turned back towards earnings where a massive 50 S&P 500 companies reported. On the whole, the trend in the earning season in the US remains positive and this continues to boost the sentiment towards US equity markets. The strength of the late US rally will no doubt boost European bourses this morning, despite yesterday key earnings in Europe disappointing.

European earnings apart, there is still a wall of cash sitting on the sidelines to be invested in the market. Any dips in equity markets have been extremely short-lived and relatively shallow. The need to invest will continue, for the time being at least, to see that the third wave of this bullish trend run for a little while yet. A conservative technical target for the FTSE 100 on this wave remains 5,500.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.