International tensions rise, push FTSE sideways
Fiona Cincotta May 8, 2019 11:46 AM
The FTSE is nearly flat, hit by the intensifying trade tensions between the US and China which also weighed on Asian stocks and Wall Street.
The FTSE is nearly flat, hit by the intensifying trade tensions between the US and China which also weighed on Asian stocks and Wall Street. For good measure, Iran shocked the markets with news that it will stop complying with some parts of the 2015 nuclear deal, introducing fresh volatility into the oil and currency markets.
Higher oil prices are putting UK travel firms and airlines under pressure but home builders provide some counterbalance for the FTSE, helped by a surprise increase in British house prices in April. The weaker dollar and a slight increase in metals prices are working in favour of big miners.
German industrial data lifts euro
The euro was given some breathing space by German industrial production numbers which showed a surprise increase in March. The common currency edged 0.14% higher against the euro and 0.37% against the pound and the DAX also moved in sync with the currency. However, Europe’s largest economy is by no means out of the woods yet particularly now that the China trade war is looking to become more ferocious.
Sterling is struggling to hold its ground against the majors, mirroring domestic political instability. The cross party talks Tuesday between Conservatives and Labour have yielded very little and there is now talk of 1 August as the new Brexit date.
Sterling is trading down over 0.3% against the euro and slightly less against the dollar which is being weighed down by the US-China trade threats and Iran’s nuclear news.
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