Spreadex Market Update

Mnuchin tariff-lifting rumours send stocks higher, pounds pulls back from Thursday’s 2nd ref highs



Though officials have denied the reports, rumours that Treasury Secretary Steven Mnuchin proposed pre-emptively lifting tariffs on Chinese imports propelled the Dow Jones to a fresh one month high on Thursday evening, with that swell of positivity carrying into Friday’s European open.

Adding around 100 points, the DAX found itself above 11000 for the first time since mid-November, with the CAC striking its own 4840, one month high after rising 0.8%. While the FTSE’s gains were of a similar size – the UK index added 0.7% – it failed to climb past 6900, a level that it has struggled with throughout the last week.

Sterling took a tumble as Friday got underway, slipping 0.3% against both the dollar and the euro. However, that comes after Thursday’s late surge, one that briefly caused the pound to strike $1.30 and €1.14 respectively for the first time in 2 months as The Telegraph revealed that MPs had been handed an A4 printout detailing the logistics of a second Brexit referendum. And while that bit of paper suggested another vote would take 14 months to organise – an issue given that Britain crashes out of the EU on March 29th –its mere existence was enough to get sterling dreaming of a Brexit reversal.

The currency will be on high alert for any more Brexit titbits as the day goes on, especially any details on what Plan B Theresa May will produce on Monday. It also has December’s retail sales reading to deal with, though it has been well prepped for the expected drop from 1.4% to -0.8% month-on-month by the UK’s troublesome set of post-Xmas updates from the sector.

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