EU agreement weakens stocks

Fiona Cincotta
By :  ,  Senior Market Analyst
  • The EU’s reprieve for Britain, that is – leave until May 22 if you still mean to – has done little for the FTSE this morning. The index is trading almost 0.8% lower, in sharp contrast with the US and Asian markets, both of which had a good day of trading that concluded with a positive close.

  • Retailers and house builders are performing well but not enough to stem the malaise in a range of other sectors. A spike in sterling’s exchange rate against the euro didn’t help but was not the dominant factor.

  • Apart from Brexit another headwind for European markets are fresh concerns that the upcoming Sino-US trade discussion will make less progress than initially hoped and that the current tariff system will remain in place for a significant amount of time.

Sterling recovers

  • Sterling gained 73 pips against the euro after the EU granted Britain a stingy reprieve before article 50 is triggered. The currency spiked at one point to EUR1.16 before nudging slightly lower but did not make a dent against the dollar, trading only marginally weaker against the US currency. Still, as Britain’s course remains undecided both stocks and currencies stay at the mercy of Westminster headlines.
Related tags: UK 100 Brexit GBP

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