The next few days should reveal whether equity markets are going to carry any risk premium for the uncertainty about the US politics that was worrying traders last week.  The relief rally in the US S&P 500 has seen it recover to within 0.5% of its high. If stock markets do not begin to falter at around current levels, it can be concluded that investors have decided to forget about last week’s concerns about the Trump Administration’s problems unless fresh news emerges.

Major bank stocks have held steady this morning as investors assimilate bank estimates that the bank tax, while damaging to them, may raise significantly less revenue than government estimates. Yesterday’s news that S&P’s credit rating downgrade applies only to smaller banks is also supportive for the majors this morning.

Despite the rising oil price, the energy sector is struggling to hold gains this morning. Traders may be wary of a looming buy the rumour; sell the fact outcome for this week’s meeting on extending oil production cuts. Markets have now widely anticipated a positive outcome, pushing oil prices up towards levels that will be increasingly attractive to marginal shale oil production in the US.