Though it was a nasty overnight session in Asia – the Nikkei et al. were hurt by Trump’s claim that a ‘phase one’ agreement could wait until after the 2020 election – the European markets managed to avoid an immediate bloodbath after the bell on Wednesday.
Joining Hong Kong on the list of disagreements between the two nations, Tuesday saw the House of Representatives approve a bill that would require Donald Trump to impose sanctions on members of the Chinese politburo in response to the country’s treatment of Uighurs in Xinjiang. Predictably furious in its response, Beijing said it would react ‘accordingly’ – not exactly the kind of exchange investors are after if a trade deal is to be put in place before December 15th’s latest round of tariffs...
Yet despite this the FTSE was the only major index to open in the red, slipping 0.3% to duck under 7150. And even then that was in large part due to the pound’s ongoing gains, the currency hitting $1.303 against the dollar and €1.176 against the euro as it rose 0.3%. This following a poll that shows the Conservatives with a 12-point lead over Labour.
In contrast the DAX and CAC both saw the mildest of rebounds. The German index – which managed to avoid Tuesday’s losses – snuck back across 13000 as it added 0.2%, while its French sibling rose 0.4%.
The markets’ resolve will be tested this afternoon, however, with the Dow Jones currently facing a 70 point drop when the bell rings on Wall Street. There is also plenty of time for Trump to bath the boards in red with a few more anti-trade headlines.
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