After struggling to keep pace during morning trading, the FTSE and pound both trundled along in much the same manner in afternoon trading. The pound avoided remained flat and avoided emulating the erratic movement of its counterparts, narrowly dodging the decade-low benchmark. Meanwhile, more analysts joined the recession fanfare with the Sino-US back-and-forth appearing no closer to resolution. The affect this had on larger European indices was an abrupt halt to their morning rallies.
Markets appear at the mercy of the largest players; the UK awaits the long-prophesied Brexit collapse that may not come.
Reflecting on market and currency movements through the day, Spreadex financial analyst Connor Campbell commented,
“A strong start from Europe somewhat dissipated in the face of a less than enthusiastic open from the Dow Jones.”
“After Goldman Sachs (NYSE: GS) warned of the rising risk of a US recession due to the ongoing and increasingly hostile trade tensions between America and China, the Dow Jones had little reason not to unravel on Monday. This meant that the index dropped more than 130 points as the bell rang on Wall Street, taking it back under 26200.”
“This Dow decline had the side effect of undermining Europe’s initial giddiness. The DAX and CAC, which at points this morning were both up more than 1%, saw their gains reduced to just 0.3% and 0.2% respectively. The FTSE, meanwhile, was left with just a handful of points, the UK index once again trapped below 7250.”
“Though it avoided a return to the scary 10-year nadir struck in the early moments of the session, the pound’s early rebound against the euro gradually waned as the day went on. Instead it was left up a paltry 0.1%, leaving it perilously close to that aforementioned decade low. A 0.2% from cable, meanwhile, put a few millimetres between sterling and levels last seen 32-months ago.”
“Desperately searching for a bit of good news, the pound will be praying for a strong wage growth figure on Tuesday, even if any positive headlines not related to Brexit are merely a plaster where emergency surgery is needed.”
Other market and macro financial updates have come from; the Monday morning market roundup, UK GDP during the second quarter, the London Stock Exchange Group (LON: LSE), the US-China currency manipulation debacle, and analysts’ outlook for markets and currencies.