A poor opening from the Dow Jones ensured that the European indices had no chance of easing their own losses on Tuesday.
Dropping 200 points, the Dow found itself back basically where it ended last week, the index completing its erasure of Monday’s over-optimistic, almost naïve gains following the announcement of a trade truce between the US and China.
The lack of firm detail regarding what was actually agreed between Trump and Xi in Argentina meant the markets were also going to have a hard time holding onto the gains that opened the month. Doubts remain not only over the long-term relationship between the two superpowers, but the short-term implementation of the ceasefire; in an example of the confusion National Economic Council director Larry Kudlow mistakenly claimed the 90-day truce would begin on 1st January, only to be corrected by the White House, which stated it had started on Saturday.
With the US markets in the red, the DAX and CAC saw their losses expand to 1% and 0.8% respectively, while the FTSE couldn’t shake a 50 point drop, the UK index’s mining and banking sectors providing a sizeable chunk of its decline.
As for the pound, a chirpy morning gave way to a nervy afternoon; against the dollar it saw its gains reduced from 0.8% to just 0.1%, while against the euro it was back in the red, dipping under €1.1205 as it fell 0.1%.
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