Jump to content

EU joins trade war - EMEA brief 21st June

Sign in to follow this  
JamesIG

  • Trade war continues with EU initiating retaliatory tariffs from tomorrow. 25% will be levied against products from whiskey to jeans and motorbikes.
  • GBPUSD hits 7 month low on fears May will be ousted as PM over Brexit.
  • FTSE index buoyed by a depreciated Sterling. 
  • Disney ups the bid to eclipse Comcast’s $35 a share cash offer for Fox with a $71bn deal, about $38 a share.
  • Trump crumbles to international pressure and signs an executive order stopping the separation of immigrant children from their families.
  • Goldman Sachs looks to expand bitcoin involvement according to COO in a Bloomberg interview.

Asian Overnight: Another mixed session in Asia saw Chinese stocks steady themselves after yesterday’s losses despite continued fears over a trade war with the US. Crude remains at the forefront of the market agenda, with weekly US crude inventories falling by the highest amount since January. Meanwhile, a weaker New Zealand GDP figure sent NZDUSD lower overnight.

UK, US and Europe: Looking ahead, the BoE rate decision is certainly the main event of the morning session, while the SNB monetary policy announcement will also grab some headlines. Look out for FTSE / Sterling correlation. The weaker the Queens pound, the higher the overseas earnings are for companies when they convert back into pounds. The BoE announcement is likely to cause some GBP volatility so make the appropriate risk management alterations to combat this. US Philly Fed manufacturing index, and unemployment claims round off the day in the US.

South Africa: The US Dollar has strengthened to weigh on commodity prices, in particular that of precious metals. The rand has resumed weakness as a result and we expect financial counters to bear the brunt of initial weakness. BHP Billiton is trading 0.5% higher in Australia which combined with a softer rand could help local diversified resources find a bid this morning. Tencent Holdings is down 2.5% on the Hang Seng, suggestive of a soft start for major holding company Naspers. 

Economic calendar - key events and forecast (times in BST)

1721458197_IGcommunityeconomiccalendar21stJune2018.thumb.png.6f887c2fa9de263a79155554ab6e804f.png

12pm – BoE interest rate decision: no change in rates expected, but watch for any changes in the voting pattern from the last vote which was 7/9 in favour of leaving rates unchanged. Market to watch: GBP crosses

1.30pm – US Philadelphia Index (June), initial jobless claims (w/e 16 June): Philly Fed index expected to fall to 28 from 34.4, initial jobless claims expected to rise to 223K from 218K. Markets to watch: US indices, USD crosses

9.30pm – Fed publishes bank stress test results: the US central bank will issue the results of these tests, so bank and other financial stocks will be in focus. Market to watch: US bank stocks

Source: Daily FX Economic Calendar

Featured video: What is scalping?

Corporate News, Upgrades and Downgrades

  • Dixons Carphone said that pre-tax profit for the full year was down 23.6%, to £382 million, while like-for-like revenue rose 4%. Slower growth in the UK and Ireland was blamed for the weaker performance. 
  • Saga traded in line with forecasts in the four months to 31 May 2018. Saga-branded retail insurance policies were up 1% year-on-year. 
  • Lloyd’s Banking Group announce hundreds of job cuts yesterday citing a change in customer behaviour.
  • Tesla files lawsuit against Martin Tripp, the former employee who allegedly orchestrated a hack and data breach of Tesla operating software.

Essity upgraded to overweight at Morgan Stanley
Nornickel GDRs upgraded to buy at Citi
Peab upgraded to hold at DNB Markets
Rio Tinto upgraded to buy at HSBC

Euronext downgraded to equal-weight at Barclays
Hypoport downgraded to neutral at Oddo BHF
Veolia downgraded to hold at Jefferies
Virgin Money cut to neutral at JPMorgan

Please note: This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Sign in to follow this  


1 Comment

Recommended Comments

IGTV now broadcasting live over the BoE announcement. 

Join Jeremy and Chris via the 'in browser' viewer. 

626697695_2018-06-2111_55_26-IGTradingPlatform_SpreadBetting.thumb.png.eed31444b7bc94b3be741f75efa167ae.png

Share this comment


Link to comment

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      586
  • Latest Forum Topics

  • Our picks

    • A US-China trade deal?; hope for Brexit breakthrough; IMF updates on economic outlook - DailyFX Key Themes
      UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar stirred hope when they both offered enthusiasm after their meeting, saying there was a “pathway” forward as they discussed the contentious border. That was followed by a meeting between the EU’s main negotiator Michel Barnier and UK Brexit minister Stephen after which it was stated they 'look forward to these intensified discussions in the coming days'. Though nothing material has yet been agreed to, this seems like a meaningful break owing to the language alone. Neither side has voiced confidence in their discussions for some time, so this does represent a significant change. 
      • 0 replies
    • Dividend Adjustments 14 Oct - 21 Oct
      Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 14 Oct 2019. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video. 
      • 0 replies
    • Trade wars; recession fears grow; gold's position - DailyFX Key Themes
      We have been unofficially engaged in a global trade war since March 2018. That is when the United States moved forward with a tariff on imported metals (steel and aluminum) from any destination outside of the country.

      As it currently stands, we are still awaiting another wave of products receiving a hefty tariff rate upgrade in approximately two months’ time while talks are set to resume on Thursday between the two parties. That said, reports over the weekend indicated China was not impressed with the Trump administration’s most recent efforts to find middle ground.
      • 0 replies
×
×