Stock indices are weaker across Europe after early trading with the auto sector under pressure on fears of the increased tariffs into the US market. A meeting today between US President Trump and EU Commission President Junkers to discuss the trade issues will be watched closely but expectations are low for any breakthrough.
Markets are also cautious of the ECB meeting on Thursday with expectations that interest rate and stimulus settings will remain steady due to the trade uncertainty. EUR is up slightly at 1.1699 up 0.15% , the GBP is at 1.3165 up 0.17% and the JPY is stronger at 111.03 up 0.15%. The DXY is last at 94.25 down 0.15%
Companies are reporting strong quarterly earnings across Europe and the USA but the guidance is a bit weak into next year as the uncertainty over tariffs and the higher input costs is reducing forward earnings potential. It is thought that Germany is keen to do some deal with the USA on trade but that France would prefer to take a tougher line and hold off on any negotiation.
The latest prices for the DAX is 12600 down 0.62% , the FTSE at 7643 down 0.81% , the CAC at 5431 down 0.05% , and the MIB at 21719 down 0.73%. In bond markets the latest prices are US10 at 2.94% , the UK10 at 1.27% , and the DE10 at 0.39% all flat.
In the Oil market the price of Brent Crude is at 73.84 up 0.57% with the threat to Iranian production the main factor. With both the US and Iran trading insults the tension has risen in the region with strong demand continuing to impact prices.