Choosing to ignore the more eyebrow-raising elements of the US-China ‘phase one’ trade agreement – a healthy dose of scepticism has greeted the deal – the markets donned their Santa hats and celebrated their early Christmas present.
The gains only ramped up as the session went on. The FTSE led the charge, boosted by a mix of the trade relief and residual goodwill related to last Friday’s election result. The UK index added an astonishing 190 points, propelling it to 7540 for the first time the start of August – for context, just a week and a half ago it was trading under 7150.
The DAX and CAC weren’t quite as giddy, though that says more about the FTSE than the Eurozone indices given they rose 0.9% and 1.1% respectively.
The Dow Jones was a step behind again. Yet its 0.7% rise pushed it past 28300 for the first time in its history, the index’s main point of concern at the very least put on the backburner for the rest of 2019.
It’s worth noting that all this growth meant investors turned a blind eye to some pretty awful flash manufacturing and services PMIs. The UK readings were especially bad, coming in at a worse than forecast 47.4 and 49.0 respectively. Admittedly these pre-election figures weren’t completely ignored – cable’s gains were cut from 0.4% to 0.1%, while against the euro the pound fell 0.2%.
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