The FTSE 100 is trading higher by almost 1% this morning as the leading UK stock benchmark attempts to catch up with its peers across the Channel and the Atlantic. The index has failed to join in the broad based rally seen across European and US stock markets, with the recovery in the pound on the diminishing prospects of a no-deal Brexit weighing on the significant component of benchmark that generates it revenue in non-sterling terms. However, with the pound now stabilising and the chances of any major market moving news on the Brexit front receding a little for the foreseeable future the index may now look to join in the global rally.
The 7360 level has capped attempted rallies for the FTSE in recent trade but a clean push up through this ceiling would pave the way for a breakout rally with the next swing resistance seen around 7470. Price is also back at the 50 SMA as shown by the yellow line above. Source: xStation
Boris considering a NI only backstop?
With parliament now suspended and the government's strategy of forcing EU concessions on the withdrawal agreement with the threat of a no-deal seemingly rendered ineffective, the attention now turns to any possible shifts in the PM’s position. One suggestion that is gaining some traction is the possibility of a NI-only backstop that would in effect see a border created in the Irish sea. Theresa May was reluctant to consider this possibility due to the DUP’s opposition and the fact that she relied upon their support to prop up her government, but due to the government recently losing their majority her successor is reliant on this. Brussels would likely be willing to accept this proposal, but whether it could pass through parliament is another thing with the ERG’s position not abundantly clear.