Jump to content

Trade Talks Restart - EMEA Brief 29 Mar

Sign in to follow this  
JoeIG

  • US-China trade talks have restarted in Beijing as U.S. Treasury Secretary Steven Mnuchin said on Friday that he had a "productive working dinner" the previous night. Investors are hopeful that progress will be made to resolve the bitter trade dispute between the two largest global economies, amid growing concern of a slowing economy as the bond market signals a possible incoming recession. 
  • Theresa May is set to make a third attempt to pass a Brexit deal today, as the MPs are asked to vote for a "blindfold Brexit" on the day that Britain was originally due to exit the EU. The format for today's vote has been crucially changed to comply with Speaker John Bercow's recent ruling, so that MPs will vote only to approve the withdrawal treaty and not the 26-page political declaration that accompanies it. 
  • Huawei's revenue and profits soar, despite recent major political headwinds. The Chinese tech giant reported revenue of over $100 billion in 2018, a 19.5% year-on-year rise. Net profit also rose 25% compared to 2017.
  • The Dow Jones rose 91.87 points to 25,717.46, whilst the S&P gained 0.4% and the Nasdaq advanced 0.3% to close at 7,669.17.
  • Asian equities followed suit as the Shanghai Composite rose more than 3.1% and Japan's Nikkei climbed 0.8% on Friday. 
  • In the currency market, the pound regained 0.3% to $1.3077 after losing more than 1% the previous day. The euro stands steady at $1.1232 and the Turkish lira dropped 1%, after it had plunged 4% the day before. 
  • U.S. crude futures traded up 0.4% at $59.55 a barrel, recovering from Thursday's low of $58.20.
  • Palladium dropped 0.4% after seeing declines of 6.6% yesterday. The precious metal has fallen from last week's peak on concerns that demand could be affected by an economic slowdown.

Asian overnight: Chinese markets were the big outperformer in a widely bullish session, with the Shenzhen composite trading 3.7% higher amid hopes for a breakthrough in US-China trade talks. Yesterday’s comments out of the US point towards widespread progress for these talks, raising the prospect of an eventual deal. Overnight data all focused in on Japan, where a slightly weaker retail sales number marked the one blot on an otherwise impressive set of data. Improved housing starts, industrial production, and unemployment helped boost confidence in the economy.

UK, US and Europe: Looking ahead, Theresa May gets a third bite of the cherry, with another meaningful vote taking place today. The failure to secure support from the DUP should consign this attempt to another loss, yet some believe that the decision to split the withdrawal agreement from the political declaration could help secure some extra votes. It is a busy morning otherwise for the pound, with final GDP, current account, net lending, mortgage approvals, and the Nationwide HPI all released at 9.30am. In the afternoon, keep an eye out for Canadian monthly GDP, alongside the US core PCE price index, personal spending, and Chicago PMI.

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

image.png

Source: Daily FX Economic Calendar

8.55am – German unemployment (March): rate to hold at 5%. Markets to watch: EUR crosses

9.30am – UK GDP (Q4, final): growth expected to be 1.3% YoY and 0.2% QoQ. Markets to watch: GBP crosses

12.30pm – US personal income (February): forecast to grow 0.2% MoM. Markets to watch: US indices, USD crosses

1.45pm – Chicago PMI (March): expected to fall to 57 from 64.7. Markets to watch: US indices, USD crosses

2pm – US pending home sales (February): expected to rise 1.6% MoM. Markets to watch: USD crosses

TBD - Parliament Brexit Vote

Corporate News, Upgrades and Downgrades

  • Renewi has cut 2020 guidance, and will also cut its dividend, after it was hit by new regulations in the Netherlands for soil treatment. Operating earnings for the year to March 2020 are expected to fall by €25 million.
  • Travis Perkins said that its CEO John Carter would stand down in August. He will be replaced by Atkins CEO Nick Roberts.
  • Bowleven has reported a drop in pre-tax losses for 2018, to $1.4 million, from $2.8 million a year earlier. Efforts to cut spending have borne fruit, helping to cut administration expenditure to $2.1 million from $3.6 million in the previous year.
  • Wells Fargo shares jumped 2.6% in after hours trading on Thursday, following an announcement that CEO Tim Sloan will be retiring.
  • AstraZeneza has struck a $6.9bn deal with Japan's Daiichi Sankyo to develop and sell a new cancer drug that is expected to treat breast and gastric cancers. 

Partners Group raised to overweight at Morgan Stanley

Boskalis downgraded to add at AlphaValue
Evraz downgraded to neutral at Citi
Tele2 downgraded to hold at Berenberg
Maersk downgraded to add at AlphaValue

IGTV featured video

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.

  • Like 1
Sign in to follow this  


1 Comment

Recommended Comments

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
×
×