Negative start of the European trading session

Asian markets ended in red after careful trading on the part of investors. Markets assimilated the news that the EU agreed to extend Brexit until 31.10.2019 (All Saints), and good reviews of trade talks were accepted with distrust. Mnuchin said the two sides had agreed on the basic mechanism for meeting the terms of the deal, but the question of the US criminal mechanism and China's desire to remove the current tariffs rather than keep them in reserve is still open. We did not see anything unexpected from FOMC, with dovish sentiment being preserved. The state markets ended at the end of the session with increases, but in Asia they did not play so positively the report from the last meeting of the Fed.

In Europe, we expect markets to start with a decline, with sentiment being held back by the still burdensome uncertainty surrounding the trade negotiations and Brexit. Today, markets will also focus on China's CPI data that did not meet expectations, and later we have data on Europe - the CPI for Germany and the US - for aid applications and PPIs. It is precisely because of cautious trading today that investors decide to take an hour of profits, which will lead to a lasting fall in the prices of the main indices.

Of course, the fact that yesterday the EU agreed with May does not mean that everything has been fully resolved, with the markets still with an elevated sense of attention for any rumors and news about Brexit. Before May, it is still a difficult task to convince the Parliament that her deal is the right one for the UK, and the issue of the Irish border is still ... urgent. Only reaching an agreement on a unified customs union will lift the bulk of uncertainty over the Irish border.

If parliament ratifies the deal soon, the UK will leave faster. If they slow down, however, the UK will have to take part in the European Parliament elections, and this is something May wants to avoid at all costs.

Indicative opening prices of major European indices:

DAX: 11891 -20 points

FTSE: 7399 -15 points

CAC: 5469 -3 points

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