A weaker pound is helping to lift several FTSE heavyweights this morning as are comments from China, leaving a small door open for the US to resume trade talks with the country. But as ever, US-China relations are not progressing in a straight line and instead could shortly become more complicated as the US is now looking to add Chinese video-surveillance companies to the list of blacklisted entities.
China is still digesting the blacklisting of Huawei earlier this week and has yet to respond with a counter-measure.
UK packaging companies Smurfit Kappa, Mondi (LON:MNDI) and DS Smith (LON:SMDS) are among the top five FTSE risers this morning. At the other end, Marks and Spencer (LON:MKS) slumped as the cost of its restructuring programme dealt a heavy blow to the company's profits.
Pound slides ahead of European elections
The day before European elections sterling is weaker against the dollar and the euro and the euro is losing ground against the greenback.
Although the elections Thursday are not getting as much news exposure as the calls for the Prime Minister to leave office, particularly after her latest Brexit offer failed to garner any support, the vote will be an indirect statement on whether the majority of the country still supports Brexit or is now pro-remain. The results will provide a key signal for MPs on which tack to take on Brexit going forward.
The pound briefly spiked against the dollar at the close of equity trading Tuesday but is now trading within a narrow channel, weaker than at any point this month.
Crude oil notches lower
Brent crude is trading below $72 this morning having lost ground overnight. Despite the decline prices are only a few dollars below a 6-month high reached in April with tensions in the Gulf and OPEC’s plans to cut production supporting prices.
The rise is being balanced out by the escalating US-China trade war which has the capacity to dampen Chinese demand in the mid to longer term. WTI is even weaker given that investors are pricing in higher supplies in the US and slightly weaker demand during the rest of the year.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.