Spreadex | Sep 11, 2019 10:09
With bond yields starting to rise, the European markets were able to indulge in some solid optimism on Wednesday morning.
However easy it is to by cynical about the shift in sentiment, the appearance of positive movement in regards to the US-China trade war – bolstered by the latter exempting 16 products produced by the former from a new round of tariffs next week – and hopes of averting a no-deal Brexit on October 31st have seemingly been cause enough for Europe to start a session with a smile on its face. That and the potential for some ECB stimulus on Thursday, a goodbye kiss from the departing Mario Draghi.
With the yield on UK 10-year gilts specifically hitting a 6-week high, the FTSE was allowed to strike its own 5-week peak as it rose 0.6%, crossing 7300 in the process. It has struggled to close beyond that level, however, so it will be interesting to see how the rest of the day pans out.
Reflecting both a prorogation-related comedown from the UK’s recent political madness, and a lack of headline-worthy data, the pound was pretty quiet after the bell. Cable was unchanged at a 6-week high of $1.235, while against the euro sterling was up 0.1%.
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