The FTSE index has steadied on Wednesday, after posting strong gains on Tuesday. In the North American session, the pair is at 7,349, down 0.16% on the day. On the release front, British CPI jumped to 2.1% in April, up from 1.9% in March. Still, this missed the estimate of 2.2%. The U.K. deficit jumped to GBP 5.0 billion, shy of the estimate of GBP 5.2 billion. This marked a 5-month high. Later in the day, the Federal Reserve releases the minutes of its May policy meeting.

The FTSE has sparkled in 2019, with gains of 9.1%. Will the positive streak continue even with Brexit tensions heating up? Prime Minister May is desperately trying to prevent the U.K. from crashing out of the EU without a deal, but it’s unclear if she will succeed. May will attempt to push a withdrawal deal through parliament for a fourth time in early June, after three previous deals failed. May has said that this deal will include a compromise on the customs union issue, but Labor and many Conservative MPs have already dismissed May’s proposal. If lawmakers shoot down the latest withdrawal proposal, the wobbly pound could fall even lower.

U.S-China trade tensions continue to trigger volatility in the equity markets. On Friday, the Trump administration 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 likely remain soft until the sides resume negotiations.

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