Dan AtkinsonLondon share prices strengthened this morning as the government sought agreement on the way forward in the Brexit talks.
Sterling weakened, but in both the stock and currency markets factors other than Brexit were at work.
Prime Minister Theresa May is due to use a speech in Northern Ireland today to assert that she can get a Parliamentary majority for a Brexit deal that will also find support in the province.
Northern Ireland is the only part of the UK with a physical border with a European Union member-state, and the future relationship with the Republic of Ireland has proved a stumbling block in negotiations.
Three-month share and Brexit rollercoaster
This morning, the blue-chip FTSE 100 index was 0.93% higher at 7,099.53, while the FTSE 250 index, more focused on the domestic economy than is the highly international FTSE 100, was 0.09% higher at 18,865.45.
In part, this may have reflected generally buoyant European markets. Share prices were higher in Frankfurt, Paris, Amsterdam and Madrid.
However, three months ago, the FTSE 100 traded at 7,103.8398 on 5 November and the FTSE 250 stood at 19,063.7109, both reflecting the fact that the full potential seriousness of Brexit deadlock in Parliament had to dawn on market players.
For the FTSE 100, the low point during the last three months came on 27 December, when it couched 6,584.6802, while the FTSE 250 stood at 17,090.4707, again a three-month low.
For the FTSE 100, the percentage decline from the 5 November figure to the three-monthly low was 7.3%, while for the FTSE 250 it was 10.4%. This may well reflect the fact that a chaotic Brexit would have more impact on FTSE 250 constituent companies than on those in the FTSE 100.
Services industries score lower than expected
Meanwhile, sterling was lower against all major currencies, but, again, other factors may have been at work. Against the euro it declined by 0.04% to €1.1396, against the dollar it dropped 0.14% to $1.3018 and against the Japanese yen it declined 0.08% to 143.165 yen.
The survey scores responses on a scale of zero to 100, with anything below 50 indicating contraction and anything above indicating expansion. While the January reading, at 50.1, was just in positive territory, analysts had expected 51, and the December reading had been 51.2.
In the longer term, currency rates have tended to mirror share prices in their response to Brexit-related events.
Sterling stood at €1.1130 on 7 January and €1.1434 on 5 November; at $1.2780 on 7 January and $1.3042 on 5 November, and at 138.815 yen on 7 January and 147.655 yen on 5 November.
