Following last Friday’s spiteful trade escalation, and then Monday’s suggestion that both the US and China are still willing to come to the negotiating table, Tuesday saw the European markets cautiously err on the negative side of things.
The open was informed by the Chinese yuan falling to a fresh 11 and a half-year low, a sign that investors are tempering their optimism about a positive outcome to the trade war appearing any time soon.
That wasn’t enough, however, to completely undo Monday’s rebound. Not yet, anyway. The FTSE remained trapped the wrong side of 7100, dipping 20 or so points; the DAX, meanwhile, was down 0.3%, with the CAC a smidge worse off as it dropped 0.4%.
For reference, the Dow Jones is similarly expected to fall 0.3% when the bell rings on Wall Street. Of course, there is a long time between now and then, and if the last few days – and August as a whole – has shown anything, it is that, at the moment, the markets can turn on a dime.
The pound was rather muted in its gains on Tuesday. Against the dollar it clawed back 0.2%, leaving it to tease $1.224, while against the euro, sterling could only add 0.1%. The latest headlines suggest that Jeremy Corbyn could back a pre-Brexit election to try and avert no deal, though that level of uncertainty would be only mild comfort to the pound.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.