FTSE Back Above 6950 As Powell/Mnuchin Comments Feed Into European Open

FTSE Back Above 6950 As Powell/Mnuchin Comments Feed Into European Open

Spreadex  | Jan 11, 2019 08:51

A late reversal from the Dow Jones on Thursday, which managed to cross 24000 for the first time in over 3 weeks, fed through the Asian markets and into Friday’s European open.

There were a couple of key reasons why the Dow overturned what was looking set to be a triple-digit, retailer-dragged decline. Firstly, Federal Reserve head honcho Jerome Powell once again attempted to reassure investors over what the central bank has planned for 2019, emphasising its ‘ability to be patient’ in regards to raising interest rates.

Secondly, and perhaps the bigger item, was Treasury Secretary Steve Mnuchin’s suggestion that China’s lead trade official, Vice Premier Liu He, will ‘most likely’ hop over to the US for some further trade talks later this month. That comment appears to have renewed hopes that the recent get-together in Beijing, though not producing any concrete progress just yet, was nevertheless a step towards an eventual trade war resolution.

With that in mind the FTSE added 30 points after the bell, an admittedly mild rise that still pushed it above 6950 and kept it at its 5-week plus highs. The pound was rather more tentative, adding 0.1% against the dollar while slipping the same amount against the euro.

That maybe because there is some significant UK data on its way this morning. The monthly GDP reading is set to hold at 0.1%, continuing the country’s fourth quarter drop-off, but with the manufacturing production figure expected to bound from -0.9% to 0.4%.

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