Tuesday market movements show indices ready ‘to turn on a dime’

Tuesday market movements show indices ready ‘to turn on a dime’

Political tensions continue to weigh on market sentiment and dampen any hopes of a prolonged rally. Last Friday’s re-escalation of trade tensions and the Yuan falling to an 11 year low on Tuesday, was countered by the idea that both the US and China would be willing to return to the negotiating table again, and impressive performance on Monday across major indices, showed markets still have the stomach for growth. Market movements on Tuesday morning didn’t fully reverse Monday’s successes but revealed just how volatile the current climate remains.

Spreadex Financial Analyst, Connor Campbell, said te following about Tuesday’s market opening,

“The open was informed by the Chinese yuan falling to a fresh 11 and a half-year low, a sign that investors are tempering their optimism about a positive outcome to the trade war appearing any time soon.”

“That wasn’t enough, however, to completely undo Monday’s rebound. Not yet, anyway. The FTSE remained trapped the wrong side of 7100, dipping 20 or so points; the DAX, meanwhile, was down 0.3%, with the CAC a smidge worse off as it dropped 0.4%.”

“For reference, the Dow Jones is similarly expected to fall 0.3% when the bell rings on Wall Street. Of course, there is a long time between now and then, and if the last few days – and August as a whole – has shown anything, it is that, at the moment, the markets can turn on a dime.”

“The pound was rather muted in its gains on Tuesday. Against the dollar it clawed back 0.2%, leaving it to tease $1.224, while against the euro sterling could only add 0.1%. The latest headlines suggest that Jeremy Corbyn could back a pre-Brexit election to try and avert no deal, though that level of uncertainty would be only mild comfort to the pound.”

Other market and macro financial updates have come from; No-Deal Brexit preparationsUK 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.