Heading into the close, the FTSE 100 is eight points higher, while US stocks are roaring higher thanks to tariff news.

The threat of global trade wars is waning, driving a fresh leg higher in risk appetite and in risk assets like equities and oil, while the usual safe havens are in retreat. These trade war headlines provide the entertaining movements in markets, but they are the noise in a steady, grinding bull market that appears to be entering a more powerful phase after the volatility and confusion of 2018 and 2019. A broader view shows that US markets are at records and European markets are rallying strongly, while earnings are continuing to beat expectations. This is not a market driven by trade wars, or by Fed ‘manipulation, but by growth in earnings and economic growth as well. The sharp rally over  the past month might see some weakness in the weeks to come, but with the S&P 500 now solidly above 3000 the future still seems promising.

Gold prices are firmly lower, breaking below key support as investors cut back on their safe haven trades. Driving it down as well is the rising US dollar, which has been bolstered by the trade war news, which comes as a welcome change from some mixed US data. Also worth watching is USDJPY, which is now on the cusp of breaking above the Y109 level that has held it back since July.

Ahead of the open, we expect the Dow to start at 27,466, down 26 points on Tuesday’s close.

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