Market Commentary December


Craig Hendry

Craig Hendry

Managing Director & Chartered Financial Planner

06 January 2017


The “Santa rally” saw the FTSE 100 rise 5.3% in December, finishing the month at an all-time high of 7,142.83. However, the gain in the FTSE 100 is more likely to be attributable to the strong performance of oil, which is up 12.6% in the month. The rise in the price of oil follows OPECs decision to cut production by 1.2m barrels of oil per day at the end of November.

In America, continued economic growth saw the Federal Reserve raise interest rates by 0.25% to 0.75%. Should the economy keep on its current growth trajectory it is likely that there will be further rises in 2017.

The European Central Bank also announced that it will continue its Asset Purchase Programme (APP) at €80bn per month until March 2017. It will then reduce the APP to €60bn per month until December 2017 and it may be extended further if required. This is an extension of the existing programme which was scheduled to end in March 2017. Many observers have suggested this is the start of tapering of QE in Europe.

FTSE 100 – 7,142.83

GBP/USD – 1.2338

GBP/Euro – 1.1689

Brent Crude – $56.82

Gold – $1,147.50 (per oz)

As at 30 December 2016

Sources:

www.bloomberg.com

www.xe.com  

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