US optimistic about Canada deal
The FTSE has slumped following the impact on the pound from a change in EU Brexit narrative whilst getting little in the way of a boost from the optimism surrounding NAFTA progress.
As of BST 13.42 the FTSE is trading at 7518.22, down 44.99, a drop of 0.59 per cen
The benchmark index has suffered the knock on effects of the strengthening of the pound following yesterday’s comments from lead EU Brexit negotiator Michel Barnier which saw sterling rise back above USD1.30. Barnier hinted at a softening in rhetoric from the EU, alluding to an exceptional deal with the UK, one not replicated with any other country.
Proactive Investors has cited comments from Spreadex analyst Connor Campbell who has said:”While the pound didn’t significantly build on Wednesday’s Barnier-boost, the currency was still strong enough to upset the FTSE.”
Barnier’s comments have been supported by French president Emmanuel Macron who, according to The Times, is eager to push for a strong alliance between Britain and the powerful trading bloc.
Revised trade deal
A revised trade deal between the two North American countries is looking more likely before Friday’s deadline, which aims to call time on the current NAFTA agreement which has been much maligned by Trump and touted as being ‘unfair’ on the US. Canadian car manufacturing will bear the brunt if a deal is not made, with a hike on tariffs.
The president had hinted that the NAFTA overhaul could go ahead without Canada if necessary but that “They (Canada) want to be part of the deal, and we gave until Friday, and I think we’re probably on track……things are working out very well.” (Proactive Investors). In response, Canadian PM Justin Trudeau has repeated the optimistic tone but also warned that, “No NAFTA deal is better than a bad NAFTA deal.” His sentiments mirrored those famously exuded by British PM Theresa May with reference to Brexit.
Mortgage approvals decline in July
Mortgage approvals for house purchases dropped to 64,768 from 65,374 in June according to The Bank of England, in a greater fall than was forecast. Overall, secured lending rose GBP3.2 billion compared with GBP3.9billion in June.
Meanwhile, Consumer Credit has dipped to almost a three year low, to just 8.5 per cent, from 8.8 per cent in June. Loans to non-financial business however increased GBP2.7 billion, double that of June’s GBP1.3 billion rise, according to Markets Insider.
Wider Market News
Books and stationary retailer WHSMITH PLC reported that it is expecting the financial results for the year to the end of August to be in line with its forecast, having successfully extended its foray into travel locations. Having cut costs on the high street side of the business, it has continued to perform well in its travel business, having recently opened eight stores at Madrid Airport and six at Rio De Janeiro airport according to Alliance News, giving the impression that this will be the way in which the company seeks to progress in the future, having reaped the rewards for targeting travel hubs.
WHSMITH will publish its full year results on October 11th. WHSmith shares were up 36 points (1.75%) to 2088.00 pence as of BST 11.53