A strong start from Europe somewhat dissipated in the face of a less than enthusiastic open from the Dow Jones.
After Goldman Sachs (NYSE:GS) warned of the rising risk of a US recession due to the ongoing and increasingly hostile trade tensions between America and China, the Dow Jones had little reason not to unravel on Monday. This meant that the index dropped more than 130 points as the bell rang on Wall Street, taking it back under 26200.
This Dow decline had the side effect of undermining Europe’s initial giddiness. The DAX and CAC, which at points this morning were both up more than 1%, saw their gains reduced to just 0.3% and 0.2% respectively. The FTSE, meanwhile, was left with just a handful of points, the UK index once again trapped below 7250.
Though it avoided a return to the scary 10-year nadir struck in the early moments of the session, the pound’s early rebound against the euro gradually waned as the day went on. Instead it was left up a paltry 0.1%, leaving it perilously close to that aforementioned decade low. A 0.2% from cable, meanwhile, put a few millimetres between sterling and levels last seen 32-months ago.
Desperately searching for a bit of good news, the pound will be praying for a strong wage growth figure on Tuesday, even if any positive headlines not related to Brexit are merely a plaster where emergency surgery is needed.
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