Despite a strong US open, the European gains dissipated this afternoon, as investors began to fret about President Xi’s speech on Tuesday.
There’s a weird sort of lag in trading at the moment, something that has been in place since the Easter break. While Europe turns its attentions to what Xi will say in his potentially week-defining address at the Boao Forum in Hainan, the Dow Jones is recouping a chunk of last Friday’s losses with a 230 point rise.
That increase seemingly involves the Dow ignoring Trump’s aggressive trade-tweeting from lunchtime to instead focus on the slightly more conciliatory tone struck by the President in his friendship comments on Sunday (not to mention the attempts by Larry Kudlow to calm things down last week). Yet, of course, there is every chance that the Dow will lose its head as the US session goes on, creating some dark clouds for the Asian and European markets to deal with on Tuesday and therefore continuing the out-of-sync trading.
As for Europe, the FTSE, which was already trailing its peers, fell by 0.2%, while the DAX saw its 100 point rise completely disappear. The pound and euro did get some licks in on the dollar, however, jumping 0.4% and 0.3% respectively (might help explain why the Dow is still doing pretty well).
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