In mid-morning trading, the FTSE 100 is 3 points higher, as trade war headlines leave investors reeling.

  • Risk appetite see-saws on conflicting trade headlines

  • Possible currency pact points to signs of agreement

  • UK GDP figure bolsters sterling

Markets continue to be buffeted by trade war stories, as the US and China prepare for more talks today. It was going to be a week of headlines, and it is far from over yet. Expectations of any progress remain low, which at least provides the potential for a pleasant surprise, and reports that the US is considering a currency pact as part of a stage one deal have helped to restore some optimism. The tussle between buyers and sellers goes on, most eloquently seen in the whipsaw movements on the Dow last night, but with 26,000 once again firmly defended we may have the makings of a base for a push higher into the end of the year, assuming talks don’t end in too stormy a fashion.

The pound continues to hold its ground against the dollar, rallying modestly from the $1.22 level, helped along by a solid 0.3% reading for GBP growth for the three months to August. While the month-on-month figure fell 0.1%, the UK economy continues to hold up well. But Brexit negotiations seem only to have a few hours left, setting the stage for both political and market volatility as the UK and EU gear up for next week’s council meeting.

Ahead of the open, we expect the Dow to start at 26,327, down 19 points on Wednesday’s close.

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