Wednesday’s bright start proved to be brief, with the European markets reversing their early growth.
While its eurozone peers dipped into the red, with the CAC and DAX down 0.1% and 0.6% respectively, the FTSE managed to stay flat around 7060 thanks to the pound’s own decline. Having risen off the back of Tuesday’s surprise 9 year high wage growth reading, sterling found itself on the back foot following an unexpected drop in September’s inflation. The regular reading came in at 2.4% against August’s 2.7%, with the core CPI slipping from 2.1% to 1.9%.
This knocked 0.4% off of cable, leaving it under $1.3145, while taking the pound down 0.2% against the euro. That those losses weren’t sharper, however, is pretty impressive, given that Wednesday is the day of the crucial EU summit, with Donald Tusk already stating there is ‘no grounds for optimism’ that there would be a breakthrough in terms of the Brexit divorce deal.
Looking to the afternoon and the Dow Jones is preparing to give back a chunk of Tuesday’s earnings-inspired surge. The futures are suggesting the Dow will dip by 75 or so points when the bell rings on Wall Street, a move that would return the index to 25700.
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