Fears surrounding the health of the Chinese economy returned on Monday to ensure a downbeat start to a Brexit-dominated week.
December was a rather nasty month for the superpower. Exports plunged 4.4%, way worse than forecast and the biggest drop in 2 years, while imports were down 7.6% year-on-year.
And though this accelerated decline comes thanks to the country’s economic battle with the US, it failed to prevent China’s trade surplus with American hitting the biggest level on record in 2018. That leaves Beijing stuck between a rock and a hard place, in desperate need of a deal with Trump, but with the US President potentially enraged by news of that sky high surplus.
Needless to say, the markets weren’t feeling too chipper in light of all this. The FTSE slipped 30 points, its commodity stocks providing a substantial chunk of the index’s losses as Brent Crude and copper fell 1.5% and 1.2% respectively. The DAX, meanwhile, was down half a percent, with the CAC shedding 0.4%.
As for sterling, it dipped 0.1% against the dollar and 0.2% against the euro. The currency’s nervousness comes ahead of Tuesday’s Parliament Brexit vote, nerves that have perhaps been kept in check by further reports over the weekend that the UK will look to extend Article 50 in the likely event of a deal defeat. Theresa May isn’t giving up just yet, however; she is set to make a statement at 3.30pm this afternoon to outline new assurances from the EU about the Irish backstop.
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