UK centre stage at Salzburg
With the EU meetings in Salzburg starting yesterday investors will be looking for clues regarding the big uncertainty that is hanging over the EU, the Brexit issue. UK Prime Minister Theresa May has been promised “10 minutes” to brief the other members on her plans. From an objective perspective, it is difficult to make the case that anyone who limits such a momentous and potentially far-reaching conversation to ten minutes is genuinely interested in achieving a solution. However, the markets appear to be hopeful, with Cable (GBPUSD) and the UK stock market (#UK100) looking more likely to break up than down. This is more significant for UK equities, which seem to be dragged up by other markets almost as an afterthought. The days of the UK Stock Market being a leading barometer of equity sentiment seems but a distant memory. The US is where it’s at, and it’s interesting to note that the Dax (#DAX30) is currently also displaying signs of renewed optimism. The market seems to be positioning itself in the expectation that Theresa May will surprise everyone and return from Salzburg with at least the foundations of a workable agreement.