FTSE exporters slide as pound rallies

The FTSE’s rally to a 6-month high yesterday came to an abrupt end this morning as the pound gained nearly 0.5% against the dollar and started to weigh down export-orientated stocks.

The breather comes as the PM has reached out to the opposition leader Jeremy Corbyn in an effort to cobble together a deal that would be broadly acceptable to the majority of both parties. Her reasoning is that by involving Labour there is a good chance of closing the gap and securing the votes she still needs to clinch a withdrawal agreement. The possibility of a softer Brexit also boosted the euro and sterling traded lower against the common currency.

US-China trade progress boosts Asian stocks

The US and Chinese trade negotiators have reportedly managed to resolve some of their most contentious issues and are close to reaching a resolution to the months-long trade talks. Although the details of the agreement have yet to be made public Asian stock markets rallied across the board with the Shanghai and Hong Kong indexes leading the way.

UK service sector contracts

The UK services sector continues to suffer from the uncertainty over Brexit and the contraction is now visible in data showing it has shrunk for the first time in nearly three years. The deterioration in the services sector could push the UK economy into a decline which would force the Bank of England to rethink it rate strategy at its next meeting.

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