After a brief respite over Christmas some of the key issues that have plagued the markets are coming back onto the agenda. While the China-US trade talks seem to have made progress the European Union is in a stalemate with the US over tariffs. The EU trade commissioner said Monday he wants discuss to EU/US trade rules when he meets with his US counterpart in January and address contentious issues like US tariffs on European steel and aluminium, cars and a total of $7.5 billion goods imposed over European subsidies for Airbus.
The FTSE see-sawed its way lower during the morning, with retailers, telecoms and oil and metals producers bearing the biggest brunt of the decline. NMC Health, which was at the centre of a contentious report before Christmas, led the risers.
Oil rises after drawdown
The last EIA weekly petroleum report of the year showed a surprise rise in US demand for crude oil as the level of inventories declined by 5.5m bbl. To keep things in perspective, the current level of reserves is still about 2% above the average level for winter and the total amount of crude in stock is now at 441.4m bbl. The report sparked some speculative buying which helped Brent Crude rise 0.48% and make up a sharp drop over the weekend.
Pound returns to strength
The pound has continued to rally and is trading at 1.3120 against the dollar and at 1.1199 against the euro. The currency continues to feed off the higher level of clarity over Brexit following the UK election and although it has slipped slightly from the post-election high it still made a gain of 6.63% over the last week.
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