The FTSE opened in positive territory but quickly started losing ground in early trading, much as most of the other European indices, as the warm fuzzy feeling from the temporary respite in the China/US trade frictions started to wear off and other concerns like slower consumer spending started to weigh.
Stocks in Asia ended their trading day mixed after a sharp rally on Monday with China’s indexes closing in the green but the Nikkei falling 2.29%. Although the US agreed not to increase tariffs on China for the next three months the fact that there is a deadline in place rather than an open-ended agreement is capping any attempts at a more serious rally.
Consumer spending lowest in a year
Daily signals that the British economy is slowing because of Brexit are not abating, the latest being consumer spending figures released Tuesday showing growth of only 0.5% in November, the slowest in a year.
Even the Black Friday spend fest was not enough to offset the trend, making retailers nervous about the outlook for Christmas sales.
Cat among the Brexit pigeons
The top advisor to the European Court of Justice threw a cat among the Brexit pigeons this morning saying that Britain can decide to withdraw its decision to leave the EU without needing the permission of the other member states.
The currency market had difficulty making anything out of this comment, possibly because British politicians would need to find a non-existing united front to make a move in any coherent direction. For the time being, the pound is slightly higher against the euro and the dollar, trading up 0.2% and 0.56%, respectively.
Currency and bond markets could see more volatility later today as PM Theresa May’s plan to start five days of debate in Parliament on her Brexit deal proposal was scuppered by opposition parties who will instead hold an emergency discussion on the government’s contempt of Parliament over the same deal.
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