Abandoning an initially placid start, the European markets started to tumble on Wednesday, scared by Donald Trump’s claim that things are going to get worse before they get better.
It appears that Trump’s pivot towards the presidential in an attempt to boost his plummeting approval ratings – urging Americans to wear face masks during a relatively sombre first daily covid-19 press conference since April – has worried investors. After all, if Trump has now dropped his long-held stance that everything is OK, then it is probably time to REALLY be concerned.
The DAX slipped 0.5%, falling back to 135100. The CAC, meanwhile, was down 0.9%, causing the French bourse to hit 5050.
The FTSE, meanwhile, dropped half a percent as it dipped below 6250 once again (getting past 6300 has been a repeated issue in the last month and a half).
What is perhaps surprising is that the UK index hasn’t even risen simply as a counterpoint to the pound’s heavy losses. Sterling dropped 0.7% against the dollar and 0.5% against the euro, on reports that the UK is ‘close to giving up hope’ of reaching a Brexit deal with the EU, with the current round of talks set to end on Thursday, and no more face-of-face meetings scheduled for July.
It’s a sign of the dumpster fire that is 2020 that a no-deal Brexit, something that has often been THE trading story over the past couple of years, is relegated to third or fourth billing due to grander geopolitical issues.
Currently the Dow Jones is set to echo Europe, with the futures pencilling in 0.2% decline once trading starts stateside.
In an indication of where investors’ heads are at, gold – buoyed by its safe haven status in times of uncertainty – rose a further 0.7% to strike a near-9 year high, and could well be on its way to a record peak of $2000 in the next couple months.
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