Things eased oh so slightly as Tuesday went on – though the markets were still in a deep, trade war-terrified shade of red.
The FTSE managed to halve its initial decline from 1% to 0.5% as lunchtime approached, allowing the index to lift back towards 7600. It appears that the pound’s own half a percent decline against the dollar, the currency’s balking at the government’s ongoing Brexit battles, helped the FTSE staunch its losses. Cable is now under $1.318 for the first time in 7 months, with sterling likely praying for the slight whiff of hawkishness from the Bank of England on Thursday.
It shows how bad things have been this week that the DAX 1.3% drop is an improvement on where it was after the bell. Like the FTSE and the pound, the eurozone indices are perhaps benefiting from the euro’s inability to fight off the dollar, with the single currency down 0.6% and at a near 3 week low.
Dow Jones facing 300 point plunge
Looking to this afternoon and there is still plenty to suggest Tuesday’s trading could go further southwards. The Dow Jones is facing a 300 point plunge when the bell rings on Wall Street, a dive that would leave the index below 24,700 and effectively complete the erasure of the gains the Dow saw in the first week or so of June. There’s not a lot on the agenda this afternoon to distract from the trade tensions, so the markets will be on high alert for any updates from Trump or Beijing.
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