Stocks pullback ahead of key G20 meetings

There’s been a little bit of downside seen in the stock markets as investors nervously await the outcome of key meetings between world leaders at the G20 summit in Buenos Aires. The FTSE 100 has dipped back below the 7000 mark to trade at its lowest level since Monday as markets across Europe feel a little tentative ahead of what could be a major event. The pound is little changed on the day and has been remarkably sanguine of late despite the barriage of Brexit-related news, with traders seemingly waiting for more information relating to whether Theresa May’s plan can pass through the Commons in next month’s key vote. On the week there’s been a mild depreciation in sterling with the largest declines seen against the antipodean currencies.

The art of the deal?

While there are many permutations regarding what could come out of this summit the main event on trader’s radars is clearly the Trump-Xi meeting and what this means for trade between the world’s two largest economies going forward. In the past few days there’s been an obvious increase in the market’s sensitivity to any trade-related comments, with traders scrambling to react to the latest headlines. Before boarding his flight to Argentina yesterday Trump suggested that a breakthrough with China could be near and any de-escalation would no doubt be warmly greeted. The US president has stated that he likes the deal in place at present and with tariffs expected to rise in both size and scope if an agreement can’t be reached, a failure to call a truce could well roil the markets. The consensus seems to feel that a breakthrough is unlikely but Trump prides himself on his self-proclaimed deal making abilities and may well look to broker an agreement especially considering the recent decline in the stock market which undermines his claims that the rally since he took office is a result of his policies.  

Rise in house price growth but demand remains “subdued”

While buyers remain cautious due to the ongoing uncertainty surrounding Brexit, there has been a small pick-up in house price growth according to the latest figures from Nationwide. A 0.3% increase month-on-month in November means that UK house prices have risen by 1.9% so far this year with the average value of a home now £214,044. The fear of a no deal and the resultant impact could be keeping growth subdued, but even if May’s proposal is approved it seems unlikely that we’ll see much more than low single-digit growth anytime soon.