The Sino-US trade push and pull seems to have finally yielded some results. The two sides have agreed to reduce tariffs on each other’s goods while they continue to hammer away at a more permanent deal, with the first phase of it likely to be signed at some point in December.
The FTSE is higher this morning and US stock futures are also reacting to the news, but they made less progress as they finished yesterday’s session close to flat.
This morning miners are among the biggest gainers from the trade news as are Asia-focused banks.
The insurance sector is throwing up mixed news this morning. RSA reported a strong rise in underwriting profits which pushed the company almost to the top of the FTSE but the results also highlighted the contrast with peer Hiscox which earlier this week warned that it expects high claims from three natural disasters that could end up costing as much as £127m. A selloff in Hiscox this morning caused the stock to drop 8.9%.
BoE likely to show caution
Sterling is a touch weaker against the euro but is gaining ground against the dollar ahead of the Bank of England’s rate setting meeting later in the day. With Brexit unresolved and the country heading for a general election the Bank is likely to sit out any major decision making and keep rates on hold until there is more clarity on the political front. At its last meeting the BoE said that any future rate rises would require a better outlook for the global economy and global economic figures, particularly if China, Eurozone and the US have not improved since then.
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