On a day that’s biggest event isn’t until this evening – the release of last month’s Fed meeting minutes – the European markets got off to a decent start.
Benefiting from the latest dip from the pound, which effectively returned Tuesday’s gains as it fell 0.3% against dollar and euro, the FTSE added 40 points on Wednesday, returning the index above 7165.
That growth was in line with what was seen in the Eurozone. Rebounding from the losses caused by the resignation of Italian Prime Minister Giuseppe Conte, the DAX rose half a percent to return to 11700, while the CAC climbed 0.9%. The FTSE MIB was even stronger, jumping 1.2%.
What is surprising is that this firmly green open came despite Trump doubling down on his trade war rhetoric. The President appeared to dismiss the risk of a recession, shifting to an ideological stance in the face of economic warning signs, stating the need to ‘take China on’ makes the battle worthwhile and that whether the outcome is good or bad in the short term is ‘irrelevant’.
That kind of talk puts even more pressure on the Fed to safeguard the American economy, meaning investors are going to be on high alert for hints that the central bank is prepared to cut rates against relatively soon when they pour over July’s meeting minutes this evening.
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