Afternoon summary: Macron bounce continues, as Tenreyro joins the BoE
Time for a recap.
Britain has a new interest rate policymaker, after the government appointed LSE professor Silvana Tenreyro to the Bank of England.
City experts have welcomed appointment of Tenreyro, who studied at Harvard and has Argentinian, Italian and UK citizenship, to the Monetary Policy Committee.
She’s been described as a ‘Brexit critic’, given her concerns over Britain’s exit from the EU and the impact of rising inequality.
Here’s what the papers are saying.
Economists reckon she’s less likely to vote for an interest rate rise than her predecessor, Kristin Forbes (one of three MPC members who wanted to raise borrowing costs this week).
European stock markets are enjoying their best day in two months, after yesterday’s French parliamentary elections proved another triumph for Emmanuel Macron.
Paris’s CAC index has lead the way, up 1.2%, with other markets also gaining ground.
The euro faded, though, after a small bounce when the results came in last night.
Macron’s La République En Marche (La REM) party, and its centre-right ally Modem, won 350 of the 577 lower house seats between them.
This leaves Macron with a clear mandate to reshuffle his cabinet and implement economic reforms, say City experts. Some also predict protests from unions, though.
The Brexit talks haven’t caused any alarm in the City, yet. The FTSE 100 has gained 65 points, or almost 1%, in a sweltering session.
Chris Beauchamp at IG says:
The long-awaited beginning of discussions between the UK and the EU has been greeted with an impressive bounce for both UK and European stocks. The rally today has been broad-based, with European markets seeing a return of buyers after weeks of indecision.
An ongoing fall in the euro is certainly helping to make life easier for European stocks, while further sterling weakness is helping to lift the FTSE 100.
The summer is supposed to be a tough period for stocks, with gains fleeting in duration, but the solid pickup in risk appetite at the beginning of the week is very encouraging, despite the lightness of the macro and corporate calendars.