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European Market Update 04 Jul 2018

Posted by Tim Sholl on 04-Jul-2018 20:55:57

Global trade tensions continue today with US and China due to apply up to US$34 billion of tariffs on each other starting on Thursday. European markets have been skittish on concern that the trade problems will spread to European companies. Auto makers have been hit hard on the threat of 20% tariff to sell in the US. Semiconductor companies have been hit today after China banned US company Micron from selling products in China. 

US markets weakened in a shortened session last night as they celebrate Independence Day today with markets closed. US markets were led lower by Apple and Caterpillar,both very exposed to China. US banks have struggled recently as the flattening of the yield curve is reducing a large slice of their revenue . The US dollar has been mixed with some weakness seen since mid last week , but long term the fundamentals seem to favour the US over both EUR , JPY and GBP.

Recent prices have the FTSE down 20 at 7572 , the Dax at 12341 down 7 , the CAC at 5331 up 14 , and the MIB at 21716 down 48. The EUR is lower at 1.1634 down 25 , the GBP is higher at 1.3219 up 25 , while the JPY is higher at 110.48 up 9. Gold has found some support at recent lows of 1237.90 and is now trading at 1257.00 up 4.50 and Brent crude is trading at 77.83 up 7 after reaching 79.70 and still looking strong despite production increases.

In economic data today we have seen PMI for services with German , Eurozone and UK all slightly better than expected , France was slightly lower than expected. All regions continue to show expansion.

No US data today with markets also waiting for US payroll numbers for June out this Friday evening.

Weekly Chart - EUR/USD - Technical support is a bit lower around 1.1390-1.1450

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Topics: Trading, Market News, European Market Update