Despite the US being accused by Beijing of starting ‘the biggest trade war in economic history’ after imposing tariffs on $34 billion of Chinese imports, the markets were remarkably sanguine on Friday.
A lack of retaliation, even if it is likely coming, from China helped the markets avoid another downturn, the lack of immediate tariff tit-for-tatting preventing a swift escalation from an itchy-fingered Donald Trump.
Not that the day’s gains were particularly noteworthy anyway. The FTSE climbed 0.3%, the UK pushing back to the same 7625 mark it started the week at, before the US-EU trade drama sent it sharply lower. The DAX, meanwhile, added another 25 points and is sitting just below 12500, an 11 day high, with the CAC rising 0.4% and the IBEX 35 up 0.2%.
As for the pound, it had more of a mixed start to the session, pinned back by the impending Tory meeting at Chequers and the potential chaos that could ensue. Against the dollar it rose 0.1%, keeping cable above $1.323, but paired that with a 0.1% decline against the euro.
The bulk of Friday’s action is likely going to be saved for the afternoon, with the release of the latest US non-farm jobs report, so the European markets will do well to hold onto their gains and prevent the hive-mind from wandering to thoughts of trade wars and Brexit back-biting.
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