The number of new coronavirus cases in China has started declining, providing a welcome boost for the FTSE and European stocks China. Airlines were among the top gainers in London on hopes that normal air transport in and out of China will resume shortly. The London index was further helped by a 12% jump in TUI shares after the travel operator reported an unexpected rise in bookings, which helped it offset the loss caused by the grounding of the Boeing 737 Max. But the early reading may still be too optimistic because although TUI managed to make a dent in the expected €400m loss caused by the grounding the reporting quarter still ended with a net loss of €115m.
Pound struggles but maintains support level around $1.29
The recent news flow has not been supportive for the pound and the currency dipped below 1.29 against the dollar before regaining some stability. The US has indicated that Britain will be relegated behind the EU when it comes to priority in trade negotiations while Michael Gove told businesses that Britain will impose post-Brexit trade barriers on the EU. Both of the decisions are setting up a scenario in which Britain’s trade position will be slowly but persistently eroded, an outcome that will create a weaker environment for the pound.
Brent crude finds resistance
Brent crude prices are still much weaker than before the start of the coronavirus outbreak but for the moment seem to have found a solid resistance level at above $53.20. Brent futures are trading up 1.7% this morning, encouraged by news that parts of China are coming back on line and that the spread of the virus has shifted into a lower gear.