The European losses steadily worsened as Wednesday went on, the indices having little to distract from them from Donald Trump’s latest trade bluster.
Falling 50 points, the FTSE found itself back at 7350, unwinding the growth managed in the first few days of the week. The DAX was in a similarly bad mood, dropping below 12100 as it shed nearly 75 points, while the CAC fell further from 5400 following a 0.7% slide. All this as Trump on Tuesday stated he was the one holding up a US-China trade deal, and that he has ‘no interest’ in an agreement that doesn’t involve Beijing going back to the commitments he claims they broke last month.
The Dow Jones – which saw its June winning streak come to a halt on Tuesday night – is expected to lose 0.3% when the bell rings on Wall Street, forcing the index back under 26000. However, it is likely that things will change after the US inflation reading is revealed pre-open, given the market’s recent Fed focus.
Analysts are expecting the figure to come in at 0.1% against the previous month’s 0.3%, another soft CPI reading that could only increase the already high likelihood of a rate cut in July. The rest of Wednesday’s trading may be predicated on whether or not the inflation data is better/worse than expected. (To add to the uncertainty, Trump claimed the country’s low inflation was a ‘beautiful thing’, despite the President regularly demanding the Fed cuts rates).
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