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.