A weaker close on Wall Street and protests in Hong Kong are keeping European markets under pressure. The FTSE is down almost 0.4%, weighed down by a decline in British American Tobacco shares. Banks and insurers are also sliding while retailers and supermarket chains are providing some counterbalance.
Hopes that the US and China would reach a trade deal before the summer holidays were doused by comments from President Trump who said that there would be no deal unless China sticks to the promises it made in earlier negotiations.
Sterling steady in eye of the no-deal storm
Currency traders are trying to work out what is happening with the Tory leadership contest as Boris Johnson launches a campaign promising a definite Brexit on 31 October.
Opposition is already building not only from politicians but industry leaders who see a no-deal Brexit as the worst case outcome. The pound has notched marginally higher against the dollar and the euro, waiting for a clearer signal.
The dollar is struggling to hold its ground and has slipped close to a three month low, still under pressure from the possible Fed rate cuts debated at the central bank’s last session.
Oil slips as trade frictions persist
No signs of an improvement in the Sino-US frictions are keeping oil prices under pressure. Brent dropped more than 2% on lack of signs of a deal and protests in Hong Kong.