Markets are in rally mode as the Friday close looms in London, with triple-digit gains for the Dax and Dow and a healthy bounce for the FTSE 100 too.

  • Hopes of progress in Brexit and trade wars spur risk appetite
  • FTSE bolstered as banks surge
  • Trump sounds upbeat on chances of trade progress

Deals are in vogue on both sides of the Atlantic it seems, as the UK and EU attempt to build on yesterday’s Varadkar/Johnson summit, and Trump prepares to meet the Chinese vice premier to hammer out an agreement. Despite indications that there is a) still a long way to go before any deal is passed, and b) that it might not be completed before 31st October and c) it still faces tough hurdles in Parliament, markets have enthusiastically engaged with the idea that the UK and the EU may yet hammer out some kind of deal that allows Brexit to take place and avoids a no deal scenario. UK and EU banks are both surging, a sign of how much Brexit has weighed on the continent’s financial sector, with  the 12% gain for Lloyds adding 18 points to the FTSE 100 for the day. Of course, a stronger pound is hurting the index as well, with key names such as British American Tobacco, Diageo and GSK all weighing heavily as investors worry about the impact of sterling. But investors should be careful – it is a long journey to the EU summit, and if details of the new plan start to leak we may find the various sides pouring cold water on it.

Meanwhile in Washington the US and China are still looking to hammer out a deal too. Equity markets have rather taken it as a given that something will be done, and have attempted to replicate last week’s rally with the aim this time of continuing into the rest of the quarter. Again, the risk of disappointment is high, but even the president seems keen on getting something done. But a partial deal still leaves plenty of room for fallout further down the line, something that should give investors pause for thought.

 

 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD clings to 3.5-week’s high, trades above 1.1000 figure

The pair is challenging the 1.1047 resistance. EUR/USD bull recovery from 34-month lows remains intact. Further coronavirus headlines are awaited.

EUR/USD News

GBP/USD hits new 2020 low and bounces amid Brexit rhetoric, coronavirus headlines

GBP/USD is trading above 1.2800 after hitting a new 2020, nearing the 1.2700 figure, as concerns about a no-trade-deal Brexit are weighing on the pound. Modest recovery seen in USD during the American session keeps the bearish pressure intact.

GBP/USD News

XAU/USD tumbles near two-week’s lows, sub-$1600/oz

Gold has been dropping sharply this Friday while reaching the 200 SMA on the four-hour chart. XAU/USD bulls gave up as sellers took the market down sharply. The bears seem to be in charge and more down could potentially be expected. 

Gold News

WTI remains under pressure around $45.00

Nothing new around crude oil prices, with rising concerns on the Chinese COVID-19 and its potential impact on the economy and the demand for the commodity keeping traders’ sentiment well depressed.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures