European open – Markets off to a bright start

European equity markets are poised to open around half a percentage point higher on Wednesday, with the FTSE the notable underperformer after the pound rallied following Theresa May’s appeal to the opposition to help break the Brexit impasse.

Source – Thomson Reuters Eikon

Positive reports in regard to US-China trade talks, which are set to resume in Washington today, helped lift sentiment again overnight with markets building on optimism from earlier in the week that stemmed from some encouraging Chinese PMIs. The reports are not necessarily out of the blue and we’ve known this week’s talks are happening but on something so significant, investors want to be constantly reassured.

We’re being told that we’re 90% of the way there which is obviously encouraging but the final 10% – which apparently includes the enforcement mechanism and the removal of tariffs – could take some time to iron out.

I think investors are happy to be patient here in the hope that the two sides get this right and put an end to a trade war that has clearly taken its toll on markets. This is a major headwind that investors will be very relieved to see resolved.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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