European Market Update 16 August 2018

Posted by Tim Sholl on 16-Aug-2018 21:13:09

Risk sentiment has improved today with a bounce in the Turkish Lira after extreme weakness on Monday. Talk of large investment in Turkey by Qatar and news that China and the US will begin fresh talks about the trade issues has stemmed the selling in many risk assets. However after the past two weeks the stock indices in Europe are all in downtrend with todays move not yet enough to turn around the trend.

The FTSE is trading at 7548 up 37 , the DAX is at 12217 up 36 , the CAC is at 5331 up 25 , while the MIB is sharply lower at 20663 down 254 after infrastructure companies dropped because of the bridge collapse.

In the FX markets we see a similiar bounce in the EUR and initially the GBP after the USD fell on the trade news. Latest prices show the EUR at  1.1369 up 24 after reaching a low of 1.1301 , and the GBP at 1.2700 and flat after better than expected retail sales. The JPY is latest at 110.87 weaker by 13. The US Dollar index is in a clear uptrend but today is weaker by 7 at 96.51 after a 96.87 high last night. Gold remains under pressure at 1178.75 with a recent low at 1160. Brent oil is last at 70.97 up 21 after a sharp fall yesterday to 70.30.

Metals were hit hard last night on concerns with US/China and the Turkish market crisis and the potential for lower economic growth.

Bond yields have moved lower as this concern has increased over the past weeks with US10 now at 2.88% , the UK10 at 1.25% , the GE10 at 0.32%.

The UK retail sales were up by 3.5% better than the 2.9% as expected , while the EUR area trade balance was EUR22.5 BN lower than the EUR 29 BN expected.

Topics: Trading, Market News, European Market Update