Keen to shake off the stink of last week’s havoc-causing recession-warnings, the European indices followed the lead of their Asian counterparts and galloped out of the gate this Monday.
Investors appeared to take to heart Trump’s claim that the US is ‘doing tremendously well’, alongside his reassurances that Washington and China are continuing to talk trade-wise.
Perhaps more important, however, were the comments of US trade advisor Peter Navarro. He insisted that the ‘Fed will be lowering rates’ – the central bank is in focus this week with July’s meeting minutes on Wednesday and the Jackson Hole Symposium on Thursday – before predicting that the ECB ‘will be engaging in monetary stimulus’ and China will be ‘engaging in fiscal stimulus’.
The prospect of a multi-nation attack on a nascent global recession, even if such measures are mere speculation at this point, was enough to cause a comfortably green glow to emanate off the European indices.
The FTSE – opening on time this Monday – made 7200 its target as it rose 0.9%, with the DAX flirting with 11700 after adding 140 points. The Dow Jones, meanwhile, is aiming for a 26100-crossing, 250 point surge later this afternoon (though there is plenty of time for confidence to wane between now and then).
With the Sunday papers full of ominous warnings about the immediate negative impact of a no-deal Brexit – as detailed by leaked details of a report on Operation Yellowhammer – and lacking further concrete evidence of a cross-party rebellion, the pound was unable to build on last week’s rebound. Instead, sterling slipped 0.1% and 0.2% against the dollar and euro respectively to sit at $1.2135 and €1.093.
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