Markets on emotional roller-coaster over US-China, Brexit talks

Global markets are reassured by hints that the US and China could eventually reach an interim deal after US President Donald Trump said the first day of Washington negotiations went very well.


Yields in the United Kingdom jumped the most after Boris Johnson and Irish Premier Varadkar said in a joint statement that they saw a pathway to a possible Brexit deal. The 10-year gilt yield rose 12.7 points, as the pound jumped to a two-week high against the US dollar, despite a meaningful decline in Britains industrial and manufacturing production in August.

We do not want to be a wet blanket, but the optimism over yesterdays statement could rapidly fade, if the European leaders dont adhere to what Irish Times called a very significant movement on the Irish border enigma. Todays meeting between Brexit Secretary Barclay and EUs chief negotiator Barnier should throw some light on whether the recent Brexit optimism has a solid funding, or it was just a flash in the pan.

While on the US - China front, positive news does not necessarily mean that China would get away with more tariffs on its US exports as scheduled for next week, unless both parties explicitly state the contrary.

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Opening calls

FTSE to open 22 points lower at 7164

DAX to open 36 points higher at 12200