The FTSE was flat in early trading this morning as the focus remains on the US government shutdown which moves into its third day. The Dollar’s weakness on a lack of progress over the weekend has boosted the Pound which, in turn, is holding back the UK’s blue chip stocks.
There could be some progress today for the Dollar to work with, however. FxPro analyst, Edward Anderson suggested, “It is likely that today’s scheduled vote by the Senate, on a stopgap spending measure, will pass ensuring the US Governments 3-day closure will come to an end.”
European markets have been affected by their own political upheaval of late but Germany appear to be making some progress on the formation of a new government after the German SPD party membership granted permission for the party leaders to begin new coalition talks with Angela Merkel. The German DAX has responded positively, reaching touching distance of the record highs the index saw back in November.
Edward Anderson added, “EUR benefitted on reports that Germanys Social Democratic Party has voted in favour to begin formal coalition talks with Chancellor Merkel’s Conservative Party.”
US equity markets closed higher on Friday, despite the eventual government shutdown, with the S&P 500 and Nasdaq indices closing at record highs. Accendo Markets analyst, Mike van Dulken commented “The tech-focused Nasdaq outperformed, while consumer staples helped the S&P to a record finish. The Dow Jones also closed higher, just shy of Wednesday’s record level, as the 30-stock index recovered from negative territory thanks to gains from Goldman Sachs, offsetting IBM weakness.”
