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European markets tread water ahead of Fed chairman's testimony

The FTSE and other European gauges are slightly lower with markets treading cautiously ahead of the Federal Reserve chairman's testimony to Congress later today which will provide an inkling into whether the Fed will cut rates at its upcoming meeting at the end of this month.

Currency markets are also in suspended animation before chair Jay Powell’s speech, with the dollar losing some ground to the euro and the pound but strengthening against the yen and the Australian dollar.

UK corporate news had barely any effect on the London index, with home builder Barratt Developments only making marginal progress despite saying that its pretax profits will likely be ahead of market expectations for this fiscal year. Airbus made more headway at the Paris Bourse, living off yesterday's rally which was prompted by news that its sales have surged nearly 30% in the second quarter as buyers shied away from Boeing airliners.

Sterling shrugs off no-deal amendment

In theory sterling should have started firming slightly because Parliament has voted in a new amendment that will make it difficult for the new Prime Minister to force through a no-deal Brexit. Although passed with a majority of only one vote, the amendment gives MPs a tool to block no-deal in October. Instead, since sterling’s decline below the key $1.25 level Tuesday there is little holding the pound up and the currency is making new two-year lows this morning.

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