After Monday’s disastrous trading, a placid European open was welcome relief, the markets deciding – so far, at least – to ignore the latest warnings from the IMF.
The Washington-based institution stated, perhaps to little surprise, that America’s trade wars with the EU and China would drag on global growth in 2018, before rippling through 2019.
Following on from that, the International Monetary Fund is now forecasting a rise of 3.7% this year and the same the next, both being lower than the previously estimated 3.9%. And while the IMF specifically highlighted the US, France, Germany and China as the countries that will, understandably, be worst hit, Britain didn’t escape the doom and gloom, with Brexit uncertainty pointed to as the major issue for the UK economy this year.
Yet, likely knackered after yesterday’s plunge, the European markets took this in their stride. The FTSE opened flat the wrong side of 7240, with the DAX and CAC nudging 0.2% and 0.3% higher respectively. Granted, all 3 indices need more than inertia given the severity of the lows – for example, the FTSE is testing levels not seen for 6 months – struck at the start of the week.
As for the forex markets, there wasn’t a whole lot of movement there either. Cable, which managed to recover the brunt of Monday’s decline by the end of the session, slipped back under $1.309, while the euro dipped 0.1% against the dollar to lurk at $1.1475.
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