Stocks gain ground as Brexit volatility calms down

Brexit volatility appears to have calmed, with traders looking ahead to the third meaningful vote. Meanwhile, US-China trade talk hopes have improved amid the introduction of a new law in China aimed at improving business conditions for international firms. 

  • Markets gain ground as a volatile week draws to an end

  • Theresa May to come back for a third vote

  • US-China trade talks boosted by new law

UK traders can finally breathe a sigh of relief, with a week of big volatility and political wrangling drawing to a close. Any respite to the intensity of Brexit is going to be fleeting, for despite the lack of any major economic events today, we are now looking towards another meaningful vote next week. For the most part Theresa May is hoping threats of a long extension will push hard-line Brexiteers towards her deal, driven by the fear that Brexit may never even happen. Despite a long extension likely providing a boost for the pound, it would be bad news for businesses who are looking for an end to this constant cloud of uncertainty that has been overhead since 2016.

Despite the constant focus on Brexit for UK markets, we have also seen significant shifts in tone over US trade relations this week, with both EU and Chinese trade talks seemingly taking a knock. However, overnight we have seen some positive tones from China, with state TV heralding substantive progress in talks with the US. Perhaps more importantly, the Chinese government has finally taken steps to encourage foreign investment into the country, with a new law passed that is supposed to create a more level playing field between Chinese and international firms in the country. However, with China seemingly rushing the law through to avert further economic disruptions, there are questions over
 quite how much of an impact it will have for firms that continue to encounter problems when expanding into China.

Ahead of the open we expect the Dow Jones to open 75 points higher, at 25,785.

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.