The FTSE was up 30 points in early trading this Tuesday morning as the Pound lost ground following news that Brexit talks have stalled on the subject of the Irish border.
This was good news for the Retailers with Morrison’s (up 3.50%), Sainsbury’s (2.13%) and Tesco (3.30%) all topping the FTSE risers this morning.
Sterling gave back some of its recent gains on reports that the discussions between Prime Minister May and EU Commission President Juncker had ended on Monday without a formal agreement. “The stumbling blocks appear to centre around the Irish border and the role of the European Court of Justice in overseeing EU citizens’ rights in the UK after Brexit. Talks are believed to resume on Wednesday in Brussels” suggested FxPro analyst, Edward Anderson.
The Pound will be looking for a positive Services PMI this morning to arrest the slide. “So far November’s PMIs have looked mighty strong, with the manufacturing reading at a 4 year high and the construction figure easily beating expectations.” commented Spreadex analyst, Connor Campbell. “Analysts are forecasting the services number to come in at 55.2 against October’s 55.6 though, as mentioned, such estimates haven’t been very accurate in the last few days.”
The Dollar, meanwhile has held onto it’s recent gains following the passing of the US Tax Reform Bill in the Senate over the weekend. “Both the Senate and the House of Representatives now need to reconcile each of their versions of the Bill – a process that is likely to face some challenges.” added Edward Anderson.
“This is standard practice and there is no reason to suggest that it will not be successful. There is every possibility that this Bill will be made law by the end of this year.”
US equity markets saw a significant swing in sentiment yesterday following the tax reform bill approval. Accendo Markets analyst, Mike van Dulken noted “The Dow Jones was the only index to hold onto gains, closing at a fresh record 58 points stronger having traded as much as 300 points higher in the session.”
“The S&P 500 and Nasdaq both closed lower, the former touching an intraday high before closing with small losses, while the latter underperformed the wider market.”
