The U.K. Stock market
- The UK stock market was higher this week. There was concern over increasing tensions between the U.S. and Iran with reports that President Trump had approved military strikes before pulling back at the last minute.
- The Pound rose this week as the BofE voted to leave rates unchanged due to the expectation of weakening economic growth, ongoing trade tensions and the increasing possibility of a no-deal Brexit.
- Following two more rounds of voting the Conservative party are left with two contenders for the post of Prime Minister. Boris Johnson and Jeremy Hunt will now campaign over the next month before a final vote is expected around 22nd July.
- Our Breadth indicator remained neutral and our Momentum indicator, although still positive, ticked lower again.
The U.S. Stock market
- The US stock market was higher. The Fed kept interest rates unchanged but signaled that a rate cut could come as early as July if deemed appropriate. The US dollar fell.
- Risk assets were also helped by potential positive developments in the US/China trade dispute. President Trump said he had a good phone conversation with the Chinese President and that there would be an extended meeting between them at the G-20 conference which will be held in Japan at the end of this week. Investors are hoping this will help avoid new tariffs on Chinese imports into the US.
- Oil rallied this week on increasing tensions in the Middle East after news that Iran shot down a U.S. drone. President Trump said he had called off a retaliatory military strike at the last minute.
- Our Breadth indicator turned back to positive this week but our Momentum indicator, although still positive, ticked lower again.
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