This is what's moving markets on 17/9/2018

by from interactive investor |

Markets remain volatile Monday as both domestic and international events unfold. Rebecca O'Keeffe, head of investment at interactive investor, brings you up to speed. 

European equity markets have started the week lower, following Asian markets down, as President Trump mulls new tariffs against China. 

President Trump's style is to escalate the pressure to try and generate as much leverage as he can in any potential negotiation, but China may not play his game, with reports that they are considering pulling out of any trade talks, making it difficult to see a resolution to the tensions in the short term.

The prospect of a prolonged dispute has piled further pressure on emerging market currencies and markets as the contagion effect continues. 

With a major lull in other news or earnings stories, the trade war is expected to dominate investor sentiment and be the major factor influencing markets over the coming days, with investors likely to adopt a relatively cautious outlook.

Source: TradingView (*)      Past performance is not a guide to future performance

While Brexit headlines are becoming increasingly shrill once again, UK markets appear to be taking a rather more sanguine view of the current economic situation.  

Despite Brexit, unemployment is at the lowest level since 1975, job vacancies are at record highs, and as a result consumer confidence is climbing steadily as wage gains have outpaced inflation for the past four months.  

This morning's IHS Markit Household Finance index held steady at 45.9 for September, the joint-highest reading since January 2015.  

This is being reflected in a gradual recovery in many UK-focused sectors of the market, even as sterling pushes higher and UK large cap global equities are negatively impacted by the double whammy of a stronger pound and rising concerns about trade.

*The horizontal lines on the chart represent previous technical support and resistance levels. The blue diagonal represents the uptrend from EU referendum low.

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