The FTSE index has reversed directions on Tuesday, after losses on Monday. In the North American session, the pair is at 7,325, up 0.216% on the day. On the release front, Mark Carney’s testimony on inflation before a parliamentary committee has been cancelled. British CBI Industrial Order Expectations slipped to -10, weaker than the estimate of -6. This marked the lowest score since November, as manufacturing orders continue to decline.

U.S-China trade tensions continue to trigger volatility in the equity markets. On Friday, the Trump administration had announced it was imposing trade sanctions on the Chinese telecom giant Huawei, a move which sent stock markets reeling on Monday. However, the U.S. Commerce Department has taken a step back, saying that it will provide 3-month exemptions to U.S. companies that sell to Huawei. The tussle over Huawei has exacerbated the trade war between the two economic giants, and risk appetite will remain soft until the sides resume negotiations.

Brexit has not been in the headlines of late, but that could change later in the week, when European Parliament elections take place. The election for the European Parliament could boost anti-Brexit parties, as the Conservatives are expected to make a poor showing. Key issues in the election, which covers all 28 member EU states, include the economic slowdown, the migrant crisis and the rise in Euroskpeticism. Euro-skeptics increased their representation in parliament from 12% to 25% in the last election, and with the dramatic increase in strength of populist parties, this trend could well continue. This could weigh on the British pound which plunged 2.1% last week, while boosting the FTSE, as investors seek alternatives to the wobbly British currency.

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