May Packs Her Bags For Brussels Once More

Wednesday, 30 January: So PM May is off back to Brussels to renegotiate her Brexit deal following last night’s parliamentary vote. Before that though, Labour leader Jeremy Corbyn is finally going to talk Brexit after refusing to for the last week or so. It could be a tricky visit for May in Brussels as EU leaders have already come out to say the Backstop is here to stay and they aren’t open for anymore talks. Despite being initially down as European markets opened this morning, the pound reversed these earlier losses to trade modestly higher over most of the day, although falling back in to the red as Wednesday came to a close. The FTSE 100 traded higher for the second consecutive day; one again British American Tobacco sat at the top of the index, rising 4.86% at the close. Miners made gains as fresh deal talks between the US and China commenced. Asia stocks were relatively unphased by upcoming developments, with the anticipation of the Fed meeting and subsequent meeting by Chair Powell remaining in focus. US rates are expected to hold steady at 2.25-2.50%. On Wall Street itself, equity indices were driven higher, while the dollar sat in the green against most major currencies.

Following its first profit warning Tim Cook’s tenure earlier in the month, Apple’s earnings were closely watched as they were announced last night. As expected, China sales are down, while not as many of us are upgrading our phones as often. Overall revenue fell 5% to $84.3bn (as expected following the previous warning), with iPhone sales down 15%. It is now expected iPhone prices will be reduced to help boost sales. Shares have almost recovered since the heavy defeat early January, momentarily reversing 2019 losses intra-day, although are down at the time of writing and are down >32% from early October highs.

Brent oil edged higher following modest gains in crude oil inventories for the week to 25th January. Following an increase of 8 million barrels the previous week, this weeks gains are more muted at 900,000 barrels. Brent is rising c.2% at the time of writing to $62.50/bbl. The majority of major equity indices ended the day higher; the CAC in France +0.94%, the FTSE 100 +1.58%, while both the S&P 500 and Dow Jones are strongly in the green. The DAX in Germany fell 0.46% after an expected fall in CPI month on month in January. However, the annual rate slowed to 1.4% year on year, down from 1.7%, and below the expected 1.6%.

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