European shares traded higher on Tuesday as Japanese and US traders return to their trading desks after an extended weekend. Despite rising geopolitical tensions in Turkey, a “risk-on” mood is taking hold across most share markets as investors brace for a highly anticipated Q3 earning season.
Photo by Artem Beliaikin.
In Europe, all eyes are on the UK after the EU’s Chief Brexit Negotiator Michel Barnier said a deal was still possible this week ahead of the European summit. The surprise came shortly after UK officials confirmed the nation is preparing a fresh proposal to break the Brexit deadlock before the 31st of October deadline. The new Brexit plan is set to be submitted and discussed with EU Commission negotiators in Brussels this morning, which may increase volatility levels towards UK assets today. At this stage, we still don’t know if the UK chose to amend its position towards the dual customs scheme in Northern Ireland or if the Government has sent a totally different solution to Brussels.
Investors are welcoming the optimistic tone between the two sides this morning as the chances of a deal reached before the weekend has just gone up. An immediate bullish reaction has been noticed on Sterling early in the morning following the news but the impact on the UK share market remains limited so far. The FTSE-100 index is drifting slightly lower, a bearish move mostly due to the mechanical effect of a rising GBP currency, while an immediate support level can still be found at 7,210pts.
