• USDJPY falls on the back of an intensifying trade war dispute.
• ‘Fang’ stocks and the heavily tech centric Nasdaq slump on the same trade war fears.
• Turkish lira gains from yesterday gives further reason for overseas investment in Turkey to remain wary. USDTRY looking like it could have entered a period of consolidation after rising nearly 25% from the beginning of the year.
• Oil prices rise on the Libyan oil export uncertainty, however OPEC still the overarching dampener with plans to raise output. 
• Gold inching down on US rate hike expectation.
• Bitcoin at critical level of support previously hit in April and February 2018, and previously November 2017.

Asian Overnight: Asian markets traded largely in the red overnight, as marginal gains throughout Japanese indices provided the one standout performer of the session. This follows yesterday's significant market declines where US Indices fell in excess of 1% (Nasdaq more than 2%). Continued fears over the impending breakdown in trade between China and the US ensured that Chinese equities were the worst performer, with the Shenzhen composite trading over 1% lower. On the data front, the BoJ core CPI reading failed to rise as expected, with the data set showing underlying inflation remaining at 0.5%.

UK, US and Europe: Another quiet day on the economic calendar sees the release of US consumer confidence this afternoon as the only major event of note. That is not to say that market volatility is going to be low, as evident by yesterday’s sharp selloff throughout European and US indices despite a near empty economic calendar.

South Africa: While trade war talks still linger markets look to have stopped the hemorrhaging for now and the local bourse looks to have already priced in much of the overnight weakness. Commodity prices remain depressed and the dollar firm. The rand remains weak although off its worst levels finding directional catalysts from factor external rather than domestic at the moment. BHP Billiton is trading 1% lower in Australia suggestive of a softer start for local diversified resources. Tencent Holdings is 0.3% lower on the Hang Seng suggesting a flat to slightly lower start for major holding company Naspers. 

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

3pm – US consumer confidence (June): expected to hold at 128. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

• Inmarsat, the privately listed communications company, has confirmed its considering a bid from Eutelsat. This has helped push the stock, which previously saw prices of 1100p in 2015 and as low as 340p in April of this year, trade above 630p. Eutelsat has until 5pm on the 23rd July to confirm an intention or rule itself out for 6 months.

• Health conscious millennials have pushed Whittards of Chelsea back in the black yesterday to a net profit of just over a quarter of a million pounds, up from a net loss of £1.4m in 2016. The craze for herbal teas amongst the younger generation, for many at the cost of caffeine based drinks such as coffee, has been an important factor in the turn around.

• Petrofac said that it continued to trade in line with forecasts, with the year-to-date order book reaching $1.8 billion. 

• Carpetright said that it suffered an annual loss of £71 million for the year, while borrowing rose sharply due to restructuring costs. Debt rose from £10 million to £54 million. 

• Polymetal has started its new gold mine in Kazazkstan ahead of schedule. Mining activities had reached full design capacity, and ‘significant’ cash flow and net income contribution should start in Q4 this year. 

ASML upgraded to add at AlphaValue
Andritz upgraded to buy at Goldman
Renault upgraded to equal-weight at Morgan Stanley
Royal Mail upgraded to sector perform at RBC

Eutelsat downgraded to hold at Kepler Cheuvreux
Gazprom GDRs cut to neutral at JPMorgan
Deutsche Bank maintains buy rating on Vodacom (SA) but reduces target to 15000c

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