European markets got off to a slow start on Friday, after trade talks between the US and China failed to offer up any solution to the brewing tensions between the two economic giants.
The FTSE dipped in early trading, while Asian markets also nudged down overnight, after negotiations concluded with no results.
Mid-level officials from both countries met in Washington this week to discuss trade, but fresh tariffs were applied by both the US and China on Thursday, which “highlighted the lack of progress being made by the two nations”, London Capital Group’s Jasper Lawler said.
“The bar had been set low for the trade negotiations and it appears that even those low expectations have been missed,” he added.
Earlier in the week, President Trump had said he did not “anticipate much” from the talks.
On Thursday, White House spokeswoman Lindsay Walters said: “We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship.”
Meanwhile, the publication of the first round of the government’s ‘technical notices’ in preparation for a potential no deal Brexit was poorly received, pulling the FTSE 100 down to close lower on Thursday, and knocking 0.6 per cent off the pound against the dollar.
Connor Campbell, financial analyst at Spreadex, said the muted market reaction on Friday offered some reason to be optimistic.
“Given the amount of bad news out there at the moment - from Thursday’s trade talk-undermining tariff tit-for-tatting between the US and China, the ominous clouds of a no deal Brexit, and Trump’s potential legal problems - the markets have done well to not lose their heads this week,” he said.
