Market News & Analysis
FTSE flies high on US-China deal
Fiona Cincotta December 16, 2019 9:22 PM
The FSTE is flying high, up 2.21% as the last full trading week of the year gets underway, boosted by UK election results and the progress on the Sino-US trade deal over the weekend. The two sides reached a deal on phase one of the negotiations which will result in China doubling its imports of US agricultural products over the next two years and with the US cutting in half existing tariffs on Chinese imports. The dreaded tariff increase on additional Chinese goods scheduled for Sunday has been called off, boosting not only the FTSE but also other European gauges.
In London, British American Tobacco is leading the gainers with a 4.48% rise, followed closely by Bunzl and Glencore.
Sterling consolidates after last week’s gains
The pound has come off the highs it hit shortly after the UK election, partially because investors had already built in some amount of upside even before the results were fully confirmed. Still, sterling is now trading in a higher channel against the dollar and this morning’s slip looks like consolidation before potentially the next push higher.
The painfully drawn-out wranglings over Brexit have taken their toll on the UK economy, eroding both the services and manufacturing sector in December. Britain’s composite PMI shrunk to 48.5, with a number under 50 indicating an overall contraction.
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