Stock markets have edged lower this afternoon, shaken by some trade war headlines that suggest a tariff rollback is still not a certainty.
As night follows day, so the tariff removal denial has followed yesterday’s positive news. Donald Trump’s comments on potential tariff rollback prompted a brief drop in equity markets, but even this has not lasted long – equities are broadly in the red, but not by much. Perhaps these headlines are beginning to lose their power, or perhaps buying pressure is simply becoming too strong. After all, investors still seem to be underweight equities, and if that is beginning to change then no trade war headline will stand in their way. It has been another strong week for equities, and despite today’s weakness there seems little sign of things slowing down. It would be nice to get trade wars out of the way, but if markets can reduce their sensitivity to this sort of thing then that will be a decent consolation prize even if the US and China continue to spar.
Sterling continues its drift lower as the UK election campaign slowly gathers speed. Next week’s UK data storm needs to be set against yesterday’s more dovish BoE, which would likely be even further down the road to looser policy were it not for the B word that is keeping everything on hold. Still, with cable within easy distance of its recent high there appears to be some cautious optimism on the UK economy.
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