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DAX at record highs as traders bank on bankers

Tuesday, June 20, 2017 - 01:49

Germany's DAX climbs to new highs as it follows through from Wall Street's record-breaking performance on Monday, amid a strong rebound in tech stocks and a sense that major central banks won't turn off the monetary policy taps just yet. David Pollard reports.

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This applause was at London's Mansion House after Mark Carney gave his speech on Tuesday. But it may as well have been from equities traders in London's share markets. (SOUNDBITE) (English) BANK OF ENGLAND GOVERNOR, MARK CARNEY, SAYING: "From my perspective given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment." Those words enough to signal no tightening in UK monetary policy, at least for now. While in the US, Wall Street hit new records on Monday. Chicago Fed president, Charles Evans suggesting the Fed should wait until year-end - to decide whether to raise its rates again. The Nikkei then hit a two-year high - in Europe, the DAX was at an all-time record. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "Despite the actions of the Fed and any potential change that we're going to see in ECB monetary policy over time the global central banks are still pumping liquidity into the system. And so investors are still awash with cash and they are still looking for homes for that for that cash." Investors confident of more upside in equities. As most dismiss recent falls in US tech stocks as a mere wobble. Those too rebounding in the US, and Europe. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "Valuations look hefty ... You can argue certain sectors are overbought. But I think it's still the case of liquidity largely trumping all." And regional factors are playing their part - as a new French president with, now, a hefty majority in parliament, also lifted sentiment. But with exceptions. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "Domestically in the U.K. with the Brexit process ongoing, that probably suggests a degree of underperformance versus relative peers." Britain's FTSE 100 the worst performing major benchmark in Europe this year. Carney's words a warning perhaps, as much as a promise.

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DAX at record highs as traders bank on bankers

Tuesday, June 20, 2017 - 01:49