The pound experiences an early morning resurgence, basking in the positive comments from the chief EU Brexit negotiator about a potential Brexit deal. Meanwhile the FTSE comes under pressure and is trading down 0.2%.
The EU’s Michel Barnier managed to lift the weight on the market caused by weeks of concerns that Britain is heading for a no-deal Brexit by saying that he sees real scope for an agreement to be hammered out in the next 6 -8 weeks.
This, together with news that the UK GDP expanded faster than expected in July, helped the pound rally 120 points Monday and sustain the rally this morning.
Though the rally has slowed down to a snail’s pace sterling is stronger against the dollar at $1.3069 and at €1.1634 against the euro.
EU–US trade talks stall
Fresh from the unfinished trade talks with Canada, the US launched a new set of negotiations with the European Union and on Monday the EU Trade Commissioner met with the US Trade Representative Robert Lighthizer.
While both sides made positive comments saying that the talks were constructive and forward looking they still they reached no breakthrough on tariffs or trade agreements.
The talks follow on from a meeting between the US President Donald Trump and the EU’s Jean-Claude Juncker in July when both presidents indicated that they were keen to avoid a worsening of the trans-Atlantic economic relationship.
However, the process may yet take a while as Lighthizer is due to be in Washington Tuesday to pick up where he left off with his Canadian friends.
Brent higher on sanctions concern but WTI lags behind
Oil prices are tangled between the push and pull of looming US sanctions against Iran and higher domestic inventories which indicate slower US demand.
Brent Crude is trading up 0.67% and West Texas Intermediate is up 0.31% as traders are becoming increasingly concerned about the impact of Iran sanctions and when they will come into effect. But the latest US data showed that, at least in the US, there is no shortage of oil.
Still, the US Energy Secretary Rick Perry has been on a travel spree to Saudi Arabia and Russia talking to the two largest global oil producers about keeping production up if Iranian supplies start receding.
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