LONDON: Europe’s main stock markets steadied Thursday as investors mull the outlook for US President Donald Trump’s economic agenda and Britain’s Brexit negotiations with the European Union.
“Investors appear unsure as to what will happen next with respect to the Trump administration’s next policy move,” said Michael Hewson, chief market analyst at CMC Markets UK.
“Will they try and revive the health care bill or move on to the trickier subject of tax reform.”
Trading floors turned red at the start of the week as Trump’s failure to push through his healthcare reform fuelled worries about the prospects for his economy-boosting agenda.
Traders went on to regain some confidence on optimism about the US economy — as data points to a healthy outlook — and the hopes the new president will eventually be able to deliver promised tax-cut and spending measures.
Markets meanwhile barely flinched Wednesday as Britain triggered the two-year process to quit the European Union, with investors having already largely priced in “Brexit” since last year’s referendum.
“Lifeless trading persisted (Thursday), with investors continuing to be broadly unmoved by the triggering of Article 50,” said Connor Campbell, financial analyst at Spreadex trading group.
On Trump, Greg McKenna, chief market strategist at AxiTrader, said: “It looks like the (recent) Trumponomics rally is as much about the actual improvement in the data as it is about expectations of the future in a Trumponomics world.”
On currency markets, the pound avoided suffering more heavy losses against the dollar and euro.
The British currency sank Wednesday following the official handover of a letter which signalled Britain’s desire to leave the EU, kicking off two years of divorce talks.
Sterling tumbled after Prime Minister Theresa May — whose letter had just been handed to EU President Donald Tusk — told parliament there was “no turning back” and warned there would be “consequences” for the country.
Analysts said focus for the pound-watchers would be on the EU’s declaration next Tuesday on Brexit, and a summit at the end of the month.—APP
