FTSE opens higher but Trump comments will keep markets on their toes
The positive start of the FTSE 100 this morning, up 0.39%, belied the tensions which will shape trading this week with trade strife between the US and a number of other countries set to escalate and ahead of a key political summit in North Korea which could shape future relations between countries in Asia.
Canada summit brings no relief on trade negotiations
The G7 summit in Canada this weekend yielded less progress than expected on trade discussions between the US and some of its key trade partners and the countries walked away without finding middle ground on terms for imports into the US. Although at the end of the summit the participants signed a joint communique this was voided by President Trump only hours after leaving the summit over comments from his Canadian counterpart Justin Trudeau.
Asian markets initially fell after Trump’s reaction but in the course of the day they gradually recovered with focus shifting onto the upcoming summit between Donald Trump and North Korea’s leader Tuesday. If these discussions manage to ease tensions over nuclear weapons on the Korean peninsula they could pave the way to building trade and finance links between North Korea and other Asian countries.
Oil prices drop as US drilling increases
The US has ramped up its drilling activity to the highest level in more than three years as has Russia, the world’s top producer next to Saudi Arabia, and this is about to start offsetting OPEC’s efforts to keep output in check since 2017, which has kept prices high in the first half of this year.
Brent crude traded down 0.4% at $76.18 while WTI prices slipped 0.3% to $65.56.
Tesco (LON:TSCO) trading update Friday
Tesco’s trading update will be a good indicator not only of the company’s trade volumes until the end of May but will also provide a glimpse into the broader performance of the UK high street in the second quarter this year. The numbers will be anticipated more keenly than usual because retailer sales were hit hard in the first three months by the cold and snow spells and the late start of the Easter holiday and consequently led to the Bank of England postponing its plans on increasing interest rates for the second half of this year.
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