The risk-averse outlook remains in place, as the FTSE 100 falls 100 points and US markets give up their early gains. 

After the storm comes the calm. US markets have struggled into positive territory, while Europe remains under pressure. A large drop yesterday prompted a small bounce in US indices, but this may not last and indeed the Dow is already struggling to hold in positive territory, and is firmly off the highs of the session. Markets face a tough few weeks if the US and China remain at loggerheads, and trade wars are now clearly feeding through to economic and corporate data. Good news in the form of US retail sales hardly shifts the dial, with China’s promise of retaliation carrying much more weight. European markets have suffered heavily, with the much bleaker economic outlook dispelling any  notion that equities this side of the Atlantic could play catch-up with their better performing US cousins. Further erosion of the January – April rally seems likely, now that yesterday’s slump has restored the bearish view. 

Oil prices have dropped back as the Gibraltar government releases the Grace 1 tanker despite a last-minute plea from the US government. Hopes are high that this will mean that Tehran will contemplate a reciprocal move regarding the Stena Impero, helping to defuse tensions in the Gulf. Economic concerns continue to leave oil under pressure too, as GDP forecasts are cut and central banks downgrade their growth forecasts

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