Although UK’s FTSE100 attempted a miraculous rebound during early trading via sterling weakness, sellers simply exploited the technical bounce to drag prices lower. Wall Street may be in store for further punishment moving forward as risk-off is the name of the game ahead of the meeting between Donald Trump and Chinese President Xi Jinping.
Global stocks traded mildly higher on Monday as investors re-accessed both the health of the global economy and major market themes for the second quarter of 2017. Although a sense of caution lingered across the board ahead of a data-packed week, Asian shares remained resilient with most stocks strolling into the green territory.
When news of a second Referendum broke on March 13, sterling initially dipped, but quickly recovered any lost ground to finish the week at one month highs. Tuesday’s announcement that Holyrood would call a second referendum barely impacted the currency. The invoking of Article 50, however, saw a fluctuation between losses and small gains, with the pound trading at $1.239 by late Wednesday night.
The renewed protectionism concerns and Trump jitters have triggered risk aversion this week consequently attracting investors to safe-haven assets. In times of unease, gold remains a trader’s best friend and such was displayed on Thursday when the metal punched above $1,253 per ounce.
Sterling has staged a remarkable rebound this week with bulls almost rebelling against the Brexit woes by propelling the British pound (GBP/USD) currency pair above 1.2500 during Thursday’s trading session. The dollar’s persistent weakness combined with February’s blockbuster retail sales figure of 1.4% may have created an illusion of a bullish bias returning to sterling.
The Trump jitters have returned with a vengeance this week with global stocks coming under renewed selling pressure as uncertainty mounts over Donald Trump’s proposed economic growth agenda. Asian shares were vulnerable to steep losses during early trading on Wednesday posting their largest drop in two weeks amid the risk-off trading mood.