Though they avoided any great losses, the European markets weren’t exactly rewarded for yesterday’s optimism, investors seemingly unimpressed by the flimsiness of the agreement struck between the US and North Korea.
The vague wording of the document signed by Trump and Kim Jong-Un, with the former’s promises of US ‘security guarantees’ to the DPRK and the latter’s pledge to ‘work towards’ the complete denuclearization of the Korean Peninsula, resulted in a muted open in Europe. The DAX and CAC managed to eke out a 0.2% and 0.1% rise respectively, while the FTSE trickled into the red by a handful of points.
The forex markets were even more unmoved. The dollar failed to gain much of an upper hand following the summit, its 0.3% increase against the yen unmatched against the pound, where it sat flat at $1.3375, and against the euro, where the greenback fell 0.1%.
The relative lack of reaction to the US/North Korea situation means the UK jobs report may end up defining Tuesday, dependant on what kind of updates the market gets on the latest Commons Brexit vote. Worryingly for the pound, which already took a knock following Monday’s manufacturing mishap, wage growth for the quarter to April is set to slip to 2.5%, completely undoing the progress made in the last few months. An unchanged unemployment rate and a fall in jobless claims likely won’t matter in the face of that average earnings index regression.
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