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FTSE pound higher as Labour leader changes tack

Article By: ,  Senior Market Analyst
January 22, 2019 4:48 AM

The FTSE has opened lower this morning but is starting to nudge higher on signs that the mood in Westminster is changing in favour of finding a Brexit solution. 

It has been clear for weeks now that for the Brexit deadlock between the Prime Minister and MPs to be resolved it would require a significant change in direction from one of the major political players. This change finally happened Tuesday when Jeremy Corbyn, who only this weekend refused to talk to the PM, agreed to a plan to give politicians a vote on whether Britain should hold a second referendum. 

As the news emerged the pound started nudging higher against the dollar, almost hitting a flat line after a negative open, and managed to slightly strengthen against the common currency to trade up 0.07%. The currency markets have long seen a hard Brexit as the worst option and any resolution that avoids this outcome is being interpreted as positive for the pound. 

EasyJet suffers from Gatwick drone disruption 

Shares in easJet gained over 3% after the company reported a 14% increase in first quarter revenues. Despite predictions of a Brexit-induced slowdown demand actually remained strong – possibly because of some early Easter bookings – with the trend likely to be maintained in the first quarter as prices start coming down, always a hook for travelers. However, most of last quarter’s revenue growth came from add-ons such as pre-booked seats and luggage fees and the growth of this income stream may prove harder to maintain. 

China growth concerns hit US futures

US futures are heading lower as concerns over Chinese economic expansion grow. Following Monday’s data showing that China’s economy is expanding at the slowest pace in decades the country’s President Xi Jinping asked senior party officials to take action against an economic slowdown. The situation is being compounded by the US-China trade spat and while that is showing no signs of a resolution the markets will remain under pressure.

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