Following the mid-term US election results yesterday, the Democrats took control of the House of Representatives away from President Trump’s Republicans but the Republicans maintained the control of the Senate and markets reacted positively.
This means President Trump may have a little more difficulty getting all his radical reforms passed.
In Europe and the UK, stock markets were higher with FTSE 100 was up 1.25% on opening. In addition, the pound rose again after reports of a potential Brexit deal by the end of November as well as UK house price inflation slowing to its lowest level since March 2013. This means that the UK economy has mixed messages at present, a stronger £ should mean FTSE 100 falls, yet it did not, it strengthened on the back of perhaps Trump now potentially struggling to push through controversial reforms and perhaps weakening his ‘trade war’ position, meaning a more stable economic picture globally. That said, the potential Brexit deal on the table is what really drove the £ up.
2018 market volatility will continue.