Taking a decidedly more optimistic view of the US-China situation than they did on Thursday, the European markets uniformly rebounded on Friday.
Somewhat following in the footsteps of the Dow Jones, which trimmed its losses to just half a percent, and the Shanghai Composite, which rallied with a bit of assistance from Beijing, the markets were aggressive their comeback after the bell. All this despite the US going ahead with its promise to increase tariffs on $200 billion worth of Chinese goods from 10% to 25% at 12.01am this morning.
A couple of things seem to have prevented another sell-off. That these tariffs don’t apply to goods currently on their way to the US has been read as creating a grace period that could potentially see a deal emerge. Ditto the fact that talks will continue in Washington this Friday and that China is yet to outline the form of its retaliation (admittedly the country hasn’t had a lot of time to do so).
The FTSE rose 0.8%, just about retaking 7250, while the DAX and CAC jumped 1% apiece, leaving the former a handful of points shy of 12100 and the latter the right side of 5350.
If UK investors can draw their attention away from the trade war, there are some key bits of data for the FTSE and pound – which is down 0.1% against the dollar and the euro – to process. The country’s first quarter GDP reading is expected to come in at 0.5% against the 0.2% seen in Q4, though its monthly counterpart is set to slip from 0.2% to 0.0%. Manufacturing production, meanwhile, is forecast to drop from 0.9% to 0.1%.
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