European shares perk up

European stock markets found some new vigor Tuesday after more reconciliatory remarks from President Trump helped turn around the decline triggered by the ramp up in Sino-US trade tensions this week.

A slew of UK company news was not all supportive for the FTSE, including Land Securities’ higher pretax losses, but Spirax-Sarco Engineering and Vodafone helped the index move higher.

Wall Street’s decline on Monday was the worst this year and though the tide seems to have temporarily turned the cautiousness caused by frostier trade relations will continue to cap trading. The prospect of Washington taxing another $300 billion worth of Chinese imports and China about to retaliate with tariffs on $60 billion of goods hit a large number of industries including agricultural, textiles, natural gas and steel.

Oil declines on trade escalation

As expected, the trade war continues to erode crude oil prices and a brief 2.7% blip higher last night dissolved into a decline this morning. The rally caused by the alleged sabotage of two Saudi oil tankers in the Gulf did not stand much chance against the decline that will come if imports from China, the world’s largest buyer of oil, start slowing down.

Sterling is a touch lower against the dollar, shrugging off news that Britain’s unemployment dropped to the lowest level since the 1970s. In amidst the Brexit drama employment increased by nearly 100,000 jobs, pushing up wages and increasing pressure on the Bank of England to reconsider raising interest rates.

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