Hesitancy reigns in markets as a fresh trade spat between the US and Europe looms, while the clock ticks down to a key European Council meeting.

  • Equities little-changed so far

  • Trump turns his focus to Europe

  • Debenhams heads towards administration

A potential Brexit extension, a looming ECB meeting and an apparent ramping up of trade tensions between the US and Europe have all conspired to keep markets in check this morning. Small gains are in evidence in Europe, and in London the FTSE 100 is marginally in positive territory. The EU appears to be willing to grant the extension that the UK craves, but it needs to see evidence that Westminster has done its homework. Despite days of talks between the Conservatives and Labour, there has been little real progress, fuelling suspicion that both sides are merely playing for time, one commodity that is in short supply. Hopes were high last week that trade tensions between the US and China were being resolved, but now the president appears keen to reopen the battle with Europe even before the one with China is resolved. Such a development is not likely to be positive for risk assets, especially after such a strong run and ahead of a vital season for earnings.

The Sports Direct/Debenhams saga looks to be at an end, as the shares are suspended from trading pending a likely CVA. Ashley’s bid to control another chunk of the high street was always going to be a tough one, given the clash of cultures, and the loss of his stake will be a lesson in hubris for many traders and investors. As the UK concentrates on Brexit, the news is yet another reminder of the crisis facing many parts of the country outside London.

Ahead of the open, we expect the Dow to start at 26,301, down 40 points on Monday’s close.

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