The FTSE leads the way forward, helped by the slightly weaker pound, and the DAX and CAC both trading down 0.1%.
Canada NAFTA talks break down
Though the US market is closed for Labour Day Monday the failed traded talks between Canada and the US are causing ripples.
The talks which were meant to lead to a renewed NAFTA deal, a trilateral trade deal between the US, Canada and Mexico, failed to yield any results other than an angry President who took to Twitter and threatened to terminate NAFTA. “Congress should not interfere with these negotiations or I will simply terminate NAFTA entirely and we will be far better off," Trump tweeted.
It is too early to call it a dead duck as the two countries will sit again around the negotiating table on Wednesday.
Asian markets lower
Asian markets had pinned their hopes on a successful resolution of the US-Canada talks, particularly after the US reached a deal with Mexico early last week, hoping that a fresh deal would mean that the US and China would also be able to come to an agreement over trade tariffs.
But as talks collapsed Asian markets took a blow, with Chinese and Hong Kong markets hit further by data showing slowing growth in China’s manufacturing industries.
China’s factory activity expansion slowed down two basis points in August to 50.6. Although a figure above 50 signifies that manufacturing is still growing it will fuel fears that reduced domestic growth in the country will bring on a global economic slowdown as it will start effecting all exporters to China.
Royal Mail’s Canadian expansion
Royal Mail, which has been cutting its UK operations aggressively over the last few years, surprised the market with news that its international arm GLS has bought Canadian parcel delivery company Dicom Canada in a deal worth £213 million.
The share price reaction was tepid, up 1.09% but in line with the general trend for Royal Mail shares which have done very little over the last five years. With some ups and downs they moved from 455 in 2013 to 448.80 today.
The deal funded from the company’s existing borrowing facilities could change that. It will give Royal Mail, the owner of Parcelforce in the UK, a foothold in Canada, which is expected to be earning money for the company from the off.
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