After Red October the markets look like they’re aiming for some November fireworks, the European indices following their US and Asian peers higher as the trade war fears that flared up at the start of the week continued to unwind.
The initial impetus for the recent rally was Donald Trump’s tweeted claim that he had been on the blower to China’s Xi Jinping, with the presidential pair’s conversation having a ‘heavy focus on trade’.
That’s not enough to justify the kind of gains seen in the last 24 hours, however. No, it was the later report from Bloomberg that Trump had asked his staff to draft a potential ceasefire ahead of the month’s G20 meeting in Argentina that really got investors excited, a collective sigh of relief following October’s horror show.
With the Dow Jones set to hit a 2 week peak of 25600 when the bell rings on Wall Street – admittedly the day’s non-farm jobs report could change that – Europe got off to a blinder. The FTSE surged 1.2%, taking the UK index to 7180 for the first time in over 3 weeks, while the DAX rose 200 points and the CAC added 1.7%.
As for the forex markets, the move away from the dollar as a safe haven asset – combined with Thursday’s seemingly positive Brexit update – helped continue cable's recovery, sending the pound back to $1.304. The euro was also on the up and up against the greenback, climbing 0.2% to strike $1.144 for the first time in more than a week.
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