Brexit Progress Key to Outperformance

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FTSE 100 & FTSE 250 Price Analysis & News

  • Brexit Headline Watch to Spark UK Asset Volatility
  • DUP Support Critical to Success of Potential Deal

Brexit Headline Watch to Spark UK Asset Volatility

Brexit remains the dominant driver for UK assets, as such, with market participants predominantly on headline watch, volatility is likely to ensue for both the FTSE 100 and FTSE 250. Reports yesterday that the UK and EU were closing in on a draft Brexit deal sparked notable outperformance in domestic stocks (FTSE 250) over international stocks (FTSE 100). However, all eyes are on the DUP’s response who remain crucial for UK PM Johnson’s ability to get a potential deal through parliament. Thus, reports this morning that the DUP are holding up progress has reduced some of the tail winds for domestic stocks. Going forward, increased optimism that a deal can be reached is likely to see the FTSE 250 outperform the FTSE 100.

FTSE 100 Forecast: Death Cross Signals Bad Omen for FTSE 100

Today’s Brexit Diary

  • UK-EU Talks to Continue Throughout session
  • EU Chief Negotiator Barnier to Brief EU Ambassadors (1400BST)
  • UK PM Johnson Chairs Cabinet (1600BST)
  • UK PM Johnson to Address 1922 Committee (1930BST)

Correlation Between FTSE 100 / FTSE 250 and GBP/USD

Source: Refinitiv, DailyFX

FTSE 100 Price Chart: Daily Time Frame (Nov 18 – Oct 19)

FTSE 100 vs FTSE 250: Brexit Progress Key to Outperformance

FTSE 250 Price Chart: Daily Time Frame (Mar 2018 – Oct 2019)

FTSE 100 vs FTSE 250: Brexit Progress Key to Outperformance

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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