Disappointing UK national accounts and activity data cast shade on European trading overnight. The British pound and stocks fell. However US traders appeared to focus on positive developments in trade with China, allowing the US dollar to slide further and pushing stocks to close higher after an indecisive trading session.

UK GDP grew by just 1.8% in June, well below estimates above 5%. Industrial production is down 20% year on year, after lifting by 6% over the month. Sterling fell. GBP/USD cracked $1.26, and EUR/GBP rose through 0.91. The weaker result seemed to weigh on European stocks

Better than forecast growth in China imports and exports reported yesterday, and increased purchases of US agricultural goods supported US sentiment. JP Morgan and Citibank both delivered better than forecast quarterly earnings, adding momentum. On the less bright side, Delta Airlines cash burn was bigger than expected.

The US dollar slid on increasing confidence, and the US SPX index hit a post-Covid high during trading. Stocks dipped briefly into the red, but all major indices finished higher after a late buying surge. The gains continued in after-market trading, following President Trump’s announcement of the signing of legislation that removes Hong Kong’s special trade status.

Oil prices swung higher on reports that the OPEC+ production increases will be offset by cuts from previously non-compliant nations. Ongoing support for bonds, and the gold price holding above US $1,800, suggests not all investors are convinced by the growth positive market moves.

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