Carrying over last Friday’s robust relief rally, investors continued to ignore the trade tensions sprouting out of the US in favour of celebrating the improved political situation in the eurozone.
A feisty G7 meeting over the weekend, with US Treasury secretary having to fend-off his furious European and Canadian peers as they vented about last week’s tariff announcement from Trump, and news that the US and China made no progress in their latest negotiations, had remarkably little impact on Monday’s trading.
Instead the Eurozone indices pushed higher, climbing back towards the levels they abandoned at the start of last week. The DAX rose 90 points, and spent the early moments of the sessions flitting around 12800, with the CAC shooting up 0.6%, buoyed by the news that Societe Generale (LON:0J6Y) might be merging with Italy’s UniCredit (LON:0RLS). The gains were larger for the IBEX 35 and FTSE MIB, the Spanish and Italian indices jumping 1.1% and 0.9% respectively as investors continued to express their relief that the brewing political crises in both countries have for now cooled.
The FTSE, which closed out May following its eurozone peers like a lost puppy, jumped more than half a percent after the bell. This allowed the index to once again cross 7700 – and tease 7750 – a level it struggled to hold above in the second half of last week.
As for the pound, it continued its glacial recovery against the dollar, adding another 0.2% to hit a 10 day peak of $1.337, while dipping by the same amount against a chirpy euro. The focus for the UK is May’s construction PMI; Friday’s manufacturing reading beat expectations, so there will be hopes that the forecast fall from 52.5 to 52.0 can be avoided.
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