The Dow Jones was more temperate in its rebound than its European peers, struggling to keep a smile on its face following the morning’s aggressive trade war rhetoric from China.
Adding around 60 points, the Dow was unable to get back to 25200, leaving it only a handful of points above yesterday’s 3 and a half month lows. The day’s preliminary Q1 GDP reading didn’t do much for the index, revised from 3.2% to a still solid 3.1% at the annualised rate. However, analysts are doubtful that pace of growth has carried over in the second quarter, with some forecasts as low as 1.3%.
Europe was unruffled by the US open. The DAX and CAC climbed 0.6% and 0.8% respectively, while the FTSE was up 60 points to 7235, benefiting from the fact its oil and mining stocks turned a blind eye to the losses incurred by Brent Crude and copper.
As for sterling, it was another day of steady losses that, in isolation, look minor, but are actually part of what has been a truly alarming month for the currency. Cable is now slipping under $1.26, an effective 5 month low, while against the euro, sterling is stuck at €1.132 compared to the €1.176 seen at the start of May.
What really compounds the pound’s situation is that at this point it is hard to see June being any better, the month set to be consumed by a Brexit-focused Tory leadership battle.