Positive sentiment for European investors last week as the Leaders summit were able to come together and agree on a plan for illegal immigration , has evaporated over the weekend as trade tensions flare again. Continued talk from the US about placing tariffs on all European cars and political problems for Angela Merkel has hurt sentiment and led to weak markets.
Stock indices have been hit across the globe with all Asian markets lower , and this is now flowing into Europe with the Dax at 12256 down 49 , the FTSE at 7574 down 62 , the CAC at 5285 down 39 , and the MIB at 21369 down 258. Economic data in Europe was slightly weaker today with PMI in Spain , France and Germany a little lower than expected.
The US dollar has regained strength after weakness into end of month on Friday with GBP weaker on continued Brexit fatigue , and JPY also weaker on poor business sentiment . US bond yields are still trading around 2.84% compared to 1.26% in the UK and 0.30% in Germany so this is helping the USD move higher.
We see the EUR trading at 1.1607 down 74 , the GBP at 1.3107 down 100 and the JPY at 110.89 up 19. The Chinese currency also weakened today to be at 6.6875 up 0.80% after some weaker date out on the weekend.
Oil continues higher even after Pres Trump called for an extra lift in production and we now have Brent trading at 78.58 down 89.
Until some breakthrough in Trade negotiations I expect stocks to remain under pressure and the USD to continue higher.
Daily Chart - EUR/USD - has weakened from last week and looking back at 1.1500 again.