I promise we’re as bored of this as you are. Its almost as if the political-macroeconomic record has buffered and keeps playing the same inconsequential monthly routine on repeat. Donald Trump tweeted on progress being made with China, following rumours that it was open to the idea of a ‘partial trade deal’. Though we’ve been here many times before, markets were happy to giddily ponder upwards on the president’s bluster. Closer to home, the pound waited tentatively following manageable GDP data, as the outcome of the Boris Johnson-Leo Varakar talks are yet to be made public. The likelihood is that little progress will have been made, and we’ll be in the same situation as before. A No-Deal Brexit looking more likely, followed by impassioned rebuttal in Commons, followed by more legislative buffers to anything happening – yawn.
Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.
— Donald J. Trump (@realDonaldTrump) October 10, 2019
With most hoping the US will ease the uneasy sentiments in markets, Trump’s indifferent attitude was echoed by some US analysts who believe the current tariff situation is ‘good politics’ for Trump.
Alas, markets were happy to chase the story of trade war progress today, and who can blame them? When there’s no actual news to be heard of – as we prepare for the rapturous finales of our various political stalemates – indices can do little but respond to empty words and mediocre fundamentals. For now, though, I’ll smugly lament the no-story stories and like my odds of being right: I look forward to being wrong.
Speaking on the day’s modest activity, Spreadex Financial Analyst Connor Campbell, commented,
“As the latest trade talks between the US and China get underway, the markets started to heat up once again as they let a tentative form of optimism take hold. And yes, we’ve been here before.”
“Despite a gloomy start to the week, there have been enough titbits in the last couple of days to keep hopes of trade progress alive. First there was Wednesday’s claim from a Chinese official that Beijing is open to a ‘partial trade deal’ in order to limit the negative impact to the country’s economy.”
“And then, this Thursday, Donald Trump tweeted that he would be meeting with Vice Premier Liu He at the White House on Friday – a step up from Washington’s usual high level negotiating team of Robert Lighthizer and Stephen Mnuchin, and perhaps a sign that something more substantial could come out of the talks.”
“Without getting too ahead of themselves, the markets pushed higher after Trump’s comments. The Dow Jones neared a one-week high as it crossed 26500 following a 150 point increase, while the DAX added 0.4% to strike its own 8-day high. The FTSE climbed half a percent, allowing the UK index to once again tickle 7200, a level it has struggled with since the market’s October-opening bloodbath.”
“Elsewhere the pound had another mixed session as it awaited the outcome of talks between Boris Johnson and Leo Varadkar. It clung onto a 0.1% rise against the dollar all day, but saw its losses against the euro widen following an unexpectedly negative August GDP reading, a 0.3% slide sending it to a fresh 5-week low.”
Elsewhere in political and macro economic news, there have been updates from; UK economy looks likely to avoid recession, Hong Kong protester shooting and China’s strategy, the Supreme Court’s ruling, the collapse of Thomas Cook (LON: TCP), ECB stimulus, the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).