EU agreement weakens stocks

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.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.