European stocks drop; British pound wobbles on Brexit fears
April 10 2019 12:02 AM
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The German share price index DAX graph is seen at the Frankfurt Stock Exchange. The DAX 30 lost 0.9% to 11,850.57 points yesterday.The German share price index DAX graph is seen at the Frankfurt Stock Exchange. The DAX 30 lost 0.9% to 11,850.57 points yesterday.

AFP/ London

The British pound gyrated yesterday as rumours and uncertainty about the Brexit endgame played havoc with investor nerves.
Prime Minister Theresa May launched a new diplomatic push to avert a no-deal Brexit and secure a new delay to the date for leaving the bloc.
Sterling bobbed briefly above $1.31 in late morning foreign exchange deals, but then fell back against both the dollar and the euro.
“In a clear example of how headline driven the pound is at present, there’s been a swift move higher and just as quick a drop back lower as the latest round of Brexit rumour and counter-rumour hit the news wires,” said David Cheetham, an analyst with XTB.
He cited reports, later denied, that German Chancellor Angela Merkel was willing to grant a five-year time limit on the backstop which saw traders rush to buy the pound in anticipation of a breakthrough.
“However, the gains were fleeting and they were promptly handed back when it was confirmed the reports were untrue and we can expect more of this sort of thing in the coming days,” Cheetham predicted.
In the event, both France and Germany said that they could agree to a Brexit delay.
German Chancellor Angela Merkel, according to a source from her party, sees an extension up to early 2020 as “possible”, while an aide to French President Emmanuel Macron said a delay “within limits” was an option, but a year “seems too long”.
Both statements helped lift sterling off the day’s worst levels.
Belgium said yesterday it is to host a mini-summit of the EU members most exposed to the dangers of a no-deal Brexit today.
Also yesterday, the IMF issued a stern warning, saying a “no-deal” Brexit would send the British economy into severe shock.
The pound is set for “another wild week” amid uncertainty over the shape of Brexit, said FXTM analyst Lukman Otunuga.
“When dealing with Brexit, one should always expect the unexpected and this will remain the mantra until more clarity is provided,” he said.
European and US stock markets meanwhile dropped as traders detected cooler relations between the United States and China over trade than they had previously hoped for, with flaring trade tensions between the US and the European Union adding to worries.
In Europe, London’s FTSE 100 was down 0.4 % to 7,425.57 points and Frankfurt’s DAX 30 lost 0.9% to 11,850.57 and Paris’s CAC 40 was down 0.7% to 5,436.42 points at close yesterday.
President Donald Trump yesterday lashed out at the EU, vowing to slap tariffs on billions in EU imports in retaliation for subsidies to aviation giant Airbus.
Markets remain on tenterhooks on the eve of the European Central Bank’s interest rate decision – and publication of the US Federal Reserve’s meeting minutes.
Earnings season also kicks off in earnest this week, with expectations low but observers hoping for some positive forward guidance.



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