China panic over, FTSE bolstered by strong PMIs

Stocks (3)

Panic sparked last night by US comments about the China trade deal being over was quickly quelled with a rebuttal and reinforced by further positive noises from President Trump himself. In a signal in what could have been, US stock futures briefly lost 400 points.

By the time London started trading, panic gave way to fresh optimism prompted by very encouraging economic numbers from the Eurozone showing that both the manufacturing and the services sector have jumped back to a four-month high. The numbers were still below the 50 mark, indicating still deteriorating conditions, but the two sectors have dug themselves out from the corona-induced slump much quicker than analysts had hoped.

Social distancing to shorten in July

The reopening of the UK will pick up pace at the start of July when cinemas, galleries and museums will open their doors, alongside pubs, hotels and hairdressers. Later today the Prime Minister is expected to announce the reduction of the two-metre social-distancing rule which has made it difficult for a number of businesses to operate. The contentious two-week quarantine is also expected to be lifted for travellers arriving from a small number of European countries.

Melrose Industries and Rolls Royce, both with a strong exposure to the airline sector, are among the top gainers of the FTSE. Oil majors are also on the rise after Brent crude prices increased $43.

US tech sector and work visas

US tech companies are in an uproar after President Trump signed an executive order banning all work visas, the type of visa Silicon Valley uses to bring in skilled foreign employees. Amazon, Facebook and Google have already voiced their disagreement, fearing that they could end up with a brain drain once the order takes effect.

More from FTSE 100

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.