European markets opened lower on Monday, despite a bullish trading session in Asia where shares extended Friday’s gains following President Trump’s announcement of a potential trade deal to be signed as early as next month. Large agricultural purchases and a new set of measures (regarding intellectual property) from China combined with no further US tariff hike this week could have boosted market sentiment today. However, investors remain cautious as the current “accord” is more seen as “good progress” than a proper deal, mostly due to a lack of substance. In addition, traders’ sentiment is also being impacted after imports/exports in China dropped more than forecast in September, showing an economy still suffering the consequences of the trade war.
In Europe, the most volatile moves came from UK assets after the latest Brexit proposal from UK PM Boris Johnson fails to satisfy the EU. The European bloc said the UK’s Brexit plans were still not good enough even though Boris Johnson warned further compromises would prevent the proposal from being approved by the Parliament in London.
Photo by Alexander Andrews.
This is strongly impacting both the Sterling and the FTSE-100 index today as investors get more and more pessimistic about a positive outcome ahead of the 31st of October deadline. The FTSE-100 index fell below the psychological 7,200pts level this morning but found support above 7,180pts.
Finally, investors are likely to encounter a trading session lacking a clear direction today as volumes are expected to be thinner than usual due to Columbus Day in the US while Tokyo remains shut for holidays.
