Looking at the backdrop for the UK100 then and obviously the main driver at this stage is Brexit. The UK is currently still scheduled to leave the EU on October 31st. However, following Johnson’s failure to gain approval for passing his deal by that date, the UK has now requested an extension to Brexit. The EU has agreed to a delay. However, they have not yet said what the new deadline will be. In the short term, UK assets have been supported. This is given that a hard Brexit now looks likely to be avoided. There is potential that Brexit could be postponed until the end of January 2020.
Technical Perspective
The UK100 is currently testing the longer-term bearish trend line from 2019 highs having pierced the level last week to print local highs of 7339.3. This level remains the key upside marker to watch. Any retracement lower from here should find support into the 7258.1 level, however, where we have prior highs offering structural support.
