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Shares in Asia were mostly higher overnight with Chinese markets leading the gains. Chinese inflation figures came out ahead of expectations, showing no signs of a cooldown in the economy despite risks of a trade war. Recent survey data had suggested confidence was falling but there will be some relief that has not yet transpired in the hard data. On Tuesday China announced a tit-for-tat response to new US tariffs with a 25% tariff on $16bn worth of US goods. For the moment markets are taking some heart from the fact that China is merely matching US tariffs and seemingly not trying to ratchet up tensions via trade or currency.
In forex markets, the British pound has been the major mover in the last 24 hours as Brexit uncertainties weigh. While the pound continues to fall against the dollar, it also dropped below key levels against the euro, marking its weakest since November last year. With the UK parliament in recess, the feeling from traders seems to be that no news is bad news and that it's better not to take the risk of holding the pound.
Oil markets recovered slightly on Thursday after taking a battering following EIA inventory numbers. The figures showed less of a drawdown in inventories than expected. The Iran sanctions appeared to be baked into the price and without a fresh catalyst, oil looks to have made an interim top.
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