Sentiment from European individual investors shows strong support for the British pound, against both the US dollar and the euro. This is what emerges from the data SERIX for the month of August and published by Spectrum Markets, the pan-European certificate market. In this regard, the currency pair Eur/Gbp hit a record sentiment level of 54 points, an all-time low since the introduction of SERIX data in 2019. In particular, the SERIX value indicates the sentiment of individual investors, on a scale where a number greater than 100 indicates a bullish sentiment, while a number below 100 indicates a bearish sentiment.
For some, the strong sentiment on the pound in August may come as a surprise, as the British currency has been impacted by several recent negative macroeconomic news. Among them, the UK reached the highest inflation rate of the last 40 yearsconsumer prices have hit record highs and several strikes are underway in a number of industries, with employees demanding substantial salary increases to keep pace with inflation.
As he claims Michael HallHead of Distribution at Spectrum Markets: “There are two events that could have contributed to creating a rather optimistic sentiment towards the pound: one is the resolute approach taken by the Bank of England, which is currently fighting inflation with rises of interest rates and raised its benchmark rate several times, the last time to 1.75%. “
Another reason could be political, Hall continues: “In view of September, investors will have thought about who he would replace Boris Johnson at 10 Downing Street, whether Foreign Minister Liz Truss or former Finance Minister Rishi Sunak; with his resignation, however, a piece of uncertainty has vanished from the market. It is possible that many European individual investors have found Johnson’s administration scandalous and erratic, and therefore may hope that new faces in the government will contribute to a more pragmatic and successful economic agenda – this will ultimately result in a more stable currency. “
Trading volumes in August on Spectrum
Over the course of August 2022, they were traded on Spectrum 123.4 million certificateswith 35.2% of trading taking place outside traditional hours (i.e. between 17:30 and 9:00).
83.9% of the certificates traded were on indices, 4.8% on commodities, 9.5% on currency pairs, 1.4% on individual stocks and 0.4% on cryptocurrencies; the top three underlying markets traded were the DAX 40 (25.3%), the S&P 500 (20.1%) and the NASDAQ 100 (12.4%).
Looking at the SERIX data for i three main underlying markets, the DAX 40 remained unchanged at 99 points; the S&P 500 rises slightly from 95 to 97; the NASDAQ 100 records a similar increase from 97 to 98, still remaining in the bearish area.