Shares took a turn for the worse in the afternoon with global geopolitics in the driving seat.
Germany’s benchmark DAX had been flat most of the afternoon, caught between the tailwind of a more dovish Federal Reserve and the headwind of possible US tariffs on European auto parts. It was only when US President doubled-down on the political uncertainty by cancelling his planned meeting with North Korea leader Kim Jong Un that European indices turned lower. Trump’s war on automakers meant the DAX led the losses across Europe with BMW (MI:BMW), Daimler (LON:0NXX), and VW (LON:0P6N) all down in excess of 2%.
The FTSE 100 lost its recent support of a flagging British pound. A surprise surge in UK retail sales during April saw sterling spring off five-month lows. It was not so much a surprise in the context of weather-battered March numbers.
Putting UK consumer behaviour in March and April together leaves the impression of some cyclical weakness—not the retail armageddon some have been pricing into the British currency. It’s early days to call a bottom in the pound but any stabilisation threatens the chances of a swift move to 8000 in the FTSE 100.