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Neverending trade wars - EMEA brief 17 Sep



  • Whilst the Tokyo markets are on holiday, most other Asian equity markets slip on reports that Washington are continuing their tariff roll outs with a focus once more on Chinese imports. Thin liquidity due to the closed Japanese market didn't help, however moves in currencies seem minor.
  • Dollar steady against a basket of major currencies, whilst gold nudges up.
  • Oil prices have generally eased as the trade war row potentially distorts the demand outlook.
  • The cryptocurrency market is seeing mixed signals as the total market cap holds a strong position over the weekend. Tim Draper, Silicon Valley venture capitalist, has predicted an $80 trillion market cap in the next 15 years, whilst others point to stronger arguments in favor of an ETF market. 

2018-09-17 07_48_08-Trading Forum _ Join Trading Discussions _ IG Community.pngAsian overnight: A largely bearish start to the week has seen Chinese and Hong Kong stocks trading sharply lower, with the Australian ASX 200 pushing back in the opposite direction in the absence of Japanese markets whom are on a national holiday. Weather related crises throughout the world have been wreaking havoc on a number of countries, and the landfall of Typhoon Mangkhut on Hong Kong and Chinese land has dented confidence in the region. Damage to the Macau area meant that we saw a sharp decline in casino stocks. Meanwhile, news that China could actually reject the latest trade talk proposals given the likely imposition of tariffs on another $200bn of goods, risk sentiment as a whole isn’t great in the region.

UK, US and Europe: Looking ahead, we have a day with precious few hugely notable releases, with the eurozone final CPI grabbing the headlines in the morning. For the afternoon, look out for the US empire state manufacturing survey, as we start the week off in a somewhat slow fashion.

South Africa: Weaker US Index Futures and Asian equity markets this morning are suggestive of a slightly softer start for the JSE All Share Index. The rand along with its emerging market currency peers has softened against the dollar, while metal prices are also trading lower this morning. BHP Billiton is 0.66% lower in Australia suggestive of a weaker start today for locally listed diversified miners. Tencent Holdings is down 2.55% in Asia, suggestive of a softer start for major holding company Naspers.  

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

2018-09-17 07_50_22-Forex Economic Calendar.png

Source: Daily FX Economic Calendar

10am – eurozone inflation (August): forecast to rise 0.2% MoM from -0.3%. Markets to watch: EUR crosses

1.30pm – US NY Empire State mfg index (September): index to fall to 23.6 from 25.6. Markets to watch: US indices, USD crosses

Corporate News, Upgrades and Downgrades

  • Prudential said that it expects its demerged UK investments business, M&G Prudential, to hold around £3.5 billion of subordinated debt. 
  • Sirius Minerals has signed a take-or-pay supply agreement with Brazilian firm Cibrafertil, for the supply and resale of potash into Brazil and other countries. 
  • Dairy Crest expects first half profits and revenue to be ahead of last year, due to a strong performance from its Clover and Cathedral City brands.  
  • Boohoo has appointed Primark’s chief operating officer John Lyttle as its new CEO. 

Immofinanz Upgraded to Hold at Baader Helvea
Concentric Upgraded to Buy at Kepler Cheuvreux

Prysmian Downgraded to Neutral at Goldman
Hays Downgraded to Hold at HSBC

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