Spreadex Market Update

Sterling buoyant following David Davis disappearance



Sterling continued to benefit from the resignation of Brexit Secretary David Davis, with his claim that he won’t challenge Theresa May’s Tory leadership, alongside the swift appointment of Dominic Raab as his replacement, extending the pound’s Monday gains.

Hopes that Davis’ grumpy abandonment of his passion project will lead Britain away from the harder EU exit Double D was after, and towards the ‘softer’ Brexit proposed by Theresa May at Chequers over the weekend has allowed the pound to ride-out Monday’s bumpy ministerial transition. Against the dollar it shot up half a percent, hitting a 3 and a half week high of $1.333, while against the euro it climbed 0.3% to sit a smidge off €1.133.

Despite all this the FTSE still managed to find its own groove on Monday, the UK index rising 0.5% to tickle 7650. That’s very much in line with the situation elsewhere, with the DAX up 0.2% and the CAC jumping 0.6%. The gains come as investors express their relief at the lack of trade war escalation between the US and China (or indeed the US and EU) over the weekend, something that had become the norm in the last few weeks.

Turning to this afternoon and the Dow Jones it looking at its own half a percent rise when the bell rings on Wall Street, a move that would leave the US index just short of 24600, its best price in a fortnight. There’s not too much US-specific stuff to deal with this Monday, so, Trump-intervention aside, should be able to keep hold of that growth.

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