FTSE close to the flat line as China seeks sanctions against the US
The stakes have moved up in the global trade tariff dispute with China approaching the World Trade Organization to ask for permission to impose sanctions against the U.S., separate from the tariff battle between the world’s largest economies.
The country wants to impose sanctions of $7 billion a year because of the USA’s non-compliance with a ruling in a dispute over US dumping duties.
Stocks fell across Asian markets this morning, and particularly in Japan as the country has become the latest target of US President Trump’s vitriol about trade. He commented late last week that his good relationship with Japan will end soon “when I tell them how much they have to pay.”
The Nikkei reacted with a 0.5% drop this morning despite the fact that the yen strengthened marginally against the dollar.
Pound drops as MPs plan to challenge Prime Minister
The pound continues to seesaw in line with Brexit news. This morning it lost just over 0.2% against the dollar on reports that 50 MPs have met to discuss how to relieve Theresa May of her post.
Technically Parliament has to pass a Brexit bill before 29 March, the deadline for the UK to leave the Union, but there are other critical deadlines in place between now and then, including the EU summit on 17-18 October by which the UK was expected to have a Brexit agreement in hand.
But as different parts of the government continue to pull in different directions the country is instead hurtling towards a no-deal Brexit, potentially economically the worst option and one that has kept sterling under pressure since August.
MPs are expected to call for a vote of no confidence during or after the Conservative party conference in few weeks’ time. A challenge to Theresa May’s leadership would deflect attention from Brexit keeping the focus on who has political power, which in turn would be negative for the pound.
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