Though not quite the blockbuster promised earlier in the day, the Dow Jones nevertheless opened sharply higher on Monday, the index celebrating an early joint Christmas present from Donald Trump and Xi Jinping.
Though a 340 point increase isn’t anything to sniff at, it is a decent whack lower than the 26000-crossing 500 point surge teased at lunchtime. Regardless, the Dow found itself at its best levels for around 3 weeks, investors relieved that the USA and China managed to agree to a trade war truce in Argentina, even if it only ends up lasting for 90 days.
It must be said, however, that these gains are very much contingent on the whole thing not unravelling in the next few days and weeks, with the markets likely set to be sensitive to discrepancies between the countries’ differing accounts of what was agreed.
The contextually disappointing US open resulted in a slight loss of momentum in Europe. The FTSE saw its gains cut from 2.3% to 1.6%, causing the UK index to duck back under 7100.
The CAC was 50 points off the day’s 5100 peak, with the DAX perhaps the most resilient of the major indices, clinging onto a 250 point climb.
As for the pound, the dollar’s own weakness prevented cable from sinking too far into the red, though sterling did see its early 0.5% rise erased and then some. Against the euro, meanwhile, the currency looked very weary, shedding another 0.4% to loiter near a one month-plus low of €1.122. This as MPs debated the frankness of the government’s 43 page summary of the legal advice given on the Brexit deal.
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