Thanksgiving didn’t get off to the happiest start for the European markets, which saw uniform losses after the bell.
The reason for the continent-wide decline is the latest mixed signals regarding a US-China trade deal. With Trump stating the two sides are in the ‘final throes’ of negotiations on Wednesday, and a senior administration official claiming a ‘phase one’ agreement is ‘millimeters away’, you’d expect more positivity.
However, the fact the US President has signed into law legislation backing pro-democracy protestors in Hong Kong may have caused another obstacle to arise at a crucial juncture. The move prompted Beijing to lambast the bill as ‘full of prejudice and arrogance’, potentially doing damage to the relationship between the superpowers just as things were starting to look up.
While not overly panicked, the DAX and CAC nevertheless fell 0.4% and 0.3% respectively. The FTSE suffered slightly more than its peers, a half a percent decline pushing it back below 7400.
The FTSE’s losses were exacerbated by the overnight surge from sterling. The pound now sits at a $1.2938 against the dollar and a near-7 month high of €1.175 against the euro after YouGov’s MRP poll – the only survey to correctly predict 2017’s hung parliament – pointed to a Tory majority of 68 seats. This would, presumably, mean the UK is leaving the EU with Boris Johnson’s deal on January 31st.
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