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Equities soar and Barclays charged by SFO

Stock markets in Europe are firmly higher as investors are more optimistic, and are snapping up relatively cheap equities. 

The fear that was prevalent in traders’ psyches last week has disappeared today. This is certainly a bullish start to the week, and if equity benchmarks clear the highs of last week we could see the positive momentum increase. The volatility index (VIX) futures are lower on the day and this is a good gauge of how equity traders feel about the markets.

Barclays have been charged by the Serious Fraud Office (SFO) in relation to activity in 2008 when the bank received a cash injection from a Qatari-backed sovereign wealth fund. It is alleged that Barclays made available a $3 billion loan facility to the government of Qatar not long after the Qatari fund invested in Barclays. In the midst of the credit crisis some banks were being bailed out by their respective governments, and investment from the Qatari fund helped Barclay’s avoid a government bailout. Shares in Barclays are up 0.9% this morning.

Scottish Mortgage Investment Trust shares have bounced back this morning as the company endured the brunt of the sell-off in equities in the past two weeks. The investment trust company was in the firing line when traders bolting from stocks in the past fortnight, and now we are seeing some stability in the equity markets, the stock is pushing higher. 

The cooling of the US dollar as assisted EUR/USD and GBP/USD. Last week the US dollar index hit its highest level in over two weeks and now we are seeing traders take their profit. It was been a quiet morning in terms of news flows, and three are no major economic updates from the UK or eurozone.

Ian McCafferty of the Bank of England (BoE) will be speaking at 4.30pm (UK time), and Mr Cafferty has a track record of holding hawkish views.

We are expecting the Dow Jones to open up 300 points at 24,490 and we are calling the S&P 500 up 33 points at 2652.

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