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FTSE stalls ahead of EU Brexit decision

London’s blue chip index is flirting with the flat line this morning as Britain awaits a decision by the EU on whether the Friday Brexit deadline will be extended and by how long. Tesco’s better than expected profits and the subsequent rally are providing some support as is the first big London IPO this year of payments processor Network International.

Although PM Theresa May asked only for a delay until 30 June EU leaders are expected to propose a much longer extension at a European summit later today. Sterling’s cautious trading is reflecting concerns that the PM may not be in the position to accept a long delay for fear of a rebellionwithin her own party and that a series of shorter delays will keep the market hanging. The pound is trading within a few pips' range against the dollar and the euro, awaiting further signals which will be supplied later in the day when the ECB meets and when the Fed releases its latest minutes.

IMF cuts US growth forecast

The Fed’s minutes are expected to provide little by way of surprise as the main outline of the central bank’s decision has already been made public: no rate hike at the moment and no rate hikes throughout the year. But the scale of the US slowdown will remain a drag on the market given that the IMF has now slashed its growth forecasts to 2.3% this year rather than the initially predicted 2.9%. The dollar market is barely breathing with the greenback trading marginally lower but in a very thin range against most majors.
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