The European markets weren’t as receptive to the latest US trade news as their Asian counterparts this Monday.
Overnight Japan’s Nikkei hit a 27 year peak, fuelled by reports of a trade deal between the USA and Canada, the latter agreeing to the terms of the NAFTA replacement after Mexico had already signed on a at the end of August.
Yet there was no such reaction in Europe, in part because the markets are more worried about America’s relationship with another country beginning with C. The DAX managed to nudge 0.2% higher, but couldn’t re-cross 12300, with the CAC remaining the wrong side of 5500 as it started the session effectively unchanged. The FTSE, meanwhile, actually fell 25 or so points, drifting back below 7500 thanks to its mining and banking stocks.
As for the forex markets, the euro’s Italian budget blues carried over from the end of September. The single currency shed another 0.3% against the dollar, keeping it at a sub-$1.158 3 week nadir, while losing 0.2% against the pound to lurk at a 10 day low. Sterling couldn’t pair its gains against the euro with any success against the greenback, however, with cable trapped below €1.304.
In terms of market-movers, it is the start of a classic new month data dump, with Monday’s focus on the latest manufacturing PMIs. The eurozone is expected to have a month-on-month drop from 54.6 to 53.3 confirmed, while the UK is looking at a minor slip from 52.8 to a fresh 2 year-plus low of 52.6.
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