On a day that will see Britain’s next prime minister revealed the European markets bounded out of the gate, while the pound displayed its nerves.
Though the Dow futures are currently looking rather meek, a couple of bits of good news from the US helped lift sentiment on Tuesday. A ‘real compromise’ – Trump’s words – between the Republicans and Democrats has seen a deal reached on the debt ceiling, while a report from the South China Post claims that representatives from Washington will be making their way to Beijing for further trade talks next week.
Held aloft by its commodity stocks, the FTSE rose 0.6%, mounting its latest challenge to 7550, a level it has struggled to stay beyond in the last week or so. The DAX, boosted by a 4% surge from Continental, teased 12400 as it jumped 100 points, with the CAC knocking on the door of 5600 following a 30 point increase.
Ahead of the Tory leadership results – a formality at this point, with Boris Johnson set to switch from MP to PM – the pound took a tumble, falling 0.4% against the dollar and 0.2% against the euro. Sterling might not actually react too much to the announcement itself, given how locked on a Johnson premiership appears to be; the currency may save its bigger movements for later in the week, as the former Mayor of London’s Cabinet starts to take shape. (Of course, this all changes if Jeremy Hunt somehow pulls off a shock win).
It might be perfect gin and tonic weather this Tuesday, but investors were opting for a different mixer after Fevertree's (LON:FEVR) full year results. The AIM stock fell 6% as it warned it was facing ‘tough’ annual growth ‘comparators over the remainder of the summer in the UK’. This as it missed revenue expectations due to ‘unseasonably poor weather’ during the half year period.
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