The FTSE started the week in a more downbeat mode as Brexit negotiations failed to make any progress over the weekend and Chinese data showed how much damage the Sino-US tariff war is doing to the country’s trade. Chinese imports have now been shrinking for five months and the September data showed a deeper contraction than in previous months.
Although the US and China made some progress late last week and President Trump suspended tariffs due to come in in mid-October the damage from the existing trade restrictions are being felt.
Sterling drops as talks reach deadlock
The pound has dropped like a pebble overnight after Brexit negotiations didn’t lead to any significant progress over the weekend. Sterling had bounced to levels not seen since the beginning of the year after Boris Johnson and his Irish counterpart indicated that they might have a solution to the Brexit deadlock. However, hopes of a resolution were dashed after EU negotiators commented that the are not getting even into the ballpark range of where they would like to be with negotiations. This gives Boris Johnson only one more week to pull the rabbit out of the hat. The pound has in the meantime slipped back to 1.2565.
Oil slides on weak Chinese data
With the situation in the Gulf seemingly quiet for the moment the oil market’s focus has turned back to the slowing global demand. Prices are coasting along the $60 level but activity is fairly unconvincing.
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