The FTSE started the day higher, although there appeared little for traders to cheers. Sentiment remained downbeat as concerns of an all out trade war weighed, particularly in light of the team which Trump is building at the White House, which is pointing to the more aggressively interventionist as far as foreign policy goes. Added to the concerns over Trump's newly formed team, reports that the President is looking to slap tariffs on $60 million worth of imports from China, no longer just steel and aluminium, is unnerving investors.
This level of action will almost certainly force retaliation from China, with Boeing (NYSE:BA) looking like the most vulnerable target. Boeing (NYSE:BA) dropped another 2.3% overnight, leading the declines with industrials on the Dow. The Dow finished over 1% lower, whilst the S&P closed down 0.6%.
The nervousness in the US and a lack of positive news flow has been a central factor to trading this week and that may not necessarily change today either. With no high impacting US economic releases, investor will cast an eye towards data of medium importance in the form of US jobless claims and US Philly Fed Business Outlook. However, it is unlikely that these data points be sufficient to brighten up the heavy mood which has sat over the markets all week.
Broker upgrades push Tesco (LON:TSCO) higher/Hammerson (LON:HMSO) lower
Whilst the FTSE is seen pushing higher, it is doing so on lower volumes as investors struggle for reasons to dive into the market. On a day light on economic data and short on company’s reporting, broker upgrades were the key driver in individual stocks. Tesco jumped 3% on a upgrade from JP Morgan, taking top position on the FTSE leader board, whilst Hammerson dropped 4% after a downgrade from Credit Suisse (SIX:CSGN).
Tensions with Russia weigh on the pound
With little else to capture investors imagination, growing tensions between UK and Russia are likely to condition trading once again today. The pound is under pressure this morning as relations between Russia and Britain hit the lowest level since the Cold War, following the Skirpal poisoning. Prime Minister Theresa May’s expulsion of 23 diplomats in response to the attack will no doubt provoke a tit-for-tat response from Russia, who have already labelled the move dangerous. Should tensions continue to rise GBP/USD which is trading at $1.3925, will look to break support at $1.3880 before heading to $1.3845. On the upside, a move above $1.3955 could see the pair target the psychological level of $1.40.
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