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European Market Update 06 August 2018

Posted by Tim Sholl on 06-Aug-2018 21:53:37

Trade issues were back in investors minds today after China announced that they will retaliate to proposed tariffs by the US . Comments in Chinese news over the weekend suggested that China is prepared to take any pain that may eventuate in this trade war which they view as a threat to their economic sovereignty. Pres Trump meanwhile suggests that the tariff threats were working and that the strategy was forcing China to negotiate a better deal. Other officials have suggested that no talks are taking place at the moment.

Banking stocks in Europe were under pressure after HSBC , the largest European bank , reported earnings that were below expectations with revenue rising by 2% and costs rising by 7%. The auto sector improved on hopes that the threatened tariffs may be negotiated away in any US/Europe deal. 

Stock indices today are mixed in low volume trade with the Dax at 12667 up 0.25% , the CAC at 5490 up 0.20% whilst the FTSE is at 7660 down 0.23% and the MIB at 21538 down 0.16%. 

In the FX markets the US Dollar remains strong with the EUR at 1.1533 down 0.30% , the GBP at 1.2927 down 0.58% on talk that a no deal Brexit is more likely , and the JPY is at 111.52 weaker by 0.22%. The DXY futures is at 95.32 , close to 12 month highs. Gold remains near recent lows at 1208 down 0.42% and Brent Crude futures at 73.94 up 1.0% with fears that renewed sanctions on Iran could push prices towards the 90 level.

Bond yields remain steady with US10 at 2.96% , the UK10 at 1.31% , and GE10 at 0.40% .

German manufacturing orders were down 4% last month much weaker than the -0.5% expected.

Daily Chart - EUR/USD - Closing in on previous lows at 1.1510.

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Topics: Trading, Market News, European Market Update