US China trade talks promise hope

US-China trade talks promise hope

London shares tracked their US peers higher and the Turkish currency market stabilized with tentative signs that the US and China are working towards a negotiated agreement over trade and tariffs.  

Negotiators from the two countries are due to meet in November to discuss the ongoing dispute. At the end of which a meeting is scheduled between President Donald Trump and his Chinese counterpart Xi Jinping. Asian stocks responded well to the news with the Shanghai Composite index bouncing back up 1.11% and Hong Kong’s Hang Seng rising 1.36%.

The dollar also changed tack, rising this morning after a 0.5% drop on Friday.

UK business confidence falls to new low

Brexit is continuing to knock business leaders’ confidence in the British economy and the recent interest rate rise is not helping.

An Institute of Directors survey which engaged with 750 UK business leaders shows that that confidence has now dropped to its lowest level this year. The result is typically a reflection of the general state of the UK economy and takes into account the strength of retail sales, the pound’s exchange rate and interest rates.

This year, as the Brexit deadline starts to draw nearer, business confidence is largely mirroring the state of the UK’s negotiations with the EU. The last time the IoD confidence index was in positive territory was in April when there was progress in Brexit talks, but since then the index has been gradually declining.

UK house price drop in August

Although the pound mostly held up this morning, reflecting the perceived improvement in the state of the China-US tariff dispute and the stabilizing of the Turkish lira, the latest house price moves will weigh on the currency.

UK house prices fell 2.3% on the month in August with an increased number of sellers trying to sell their properties fast now that the UK interest rates have risen. The average value of houses has dropped by roughly £7,200 in the month, with the biggest falls in London and the commuting areas around it.

The pound traded up 0.08% against the euro, up against the yen and down 0.04% against the dollar.