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Trump Threatens Tariffs on EU Goods; Oil Continues to Rise - EMEA Brief 09 Apr



  • The Office of the United States Trade Representative has posted a list of goods that the US is considering to impose tariffs on from the EU, which includes aircraft, motorbikes, cheese and wine. The tariffs on some $11bn products from the EU is in response to the subsidies the bloc gives to Boeing's rival Airbus, which has caused "adverse effects to the Unites States".
  • US equities had a mixed session on Monday coming of the back of a strong growth last week. Both the S&P and Nasdaq edged marginally higher, increasing by 0.1% and 0.2% respectively. However, the Dow dropped 0.26% led by a 5% decline in disaster-struck airline Boeing and a downgrade in General Electric by JP Morgan which caused a 5% decline.
  • Hong Kong's Hang Seng and the Shanghai Composite both rose by 0.3% in what was a mixed session for Asian stocks. Japan's Topix fell off 0.2% whilst the ASX index saw little movement, advancing just 12 points.
  • Theresa May is set to meet Emmanuel Macron and Angela Merkel today to hold Brexit talks on securing an extension to the 30th of June for Brexit. There will be an emergency EU summit on Wednesday whereby all EU members will vote on the proposed delay to Brexit.
  • Oil prices reached new 2019 highs yesterday due to a rise in Libyan conflict. Brent crude futures rose 1.1% to $71.10 per barrel whilst US crude futures advances 2.1% to $64.40 per barrel.
  • Gold futures edged 0.26% higher to close at $1303.3 per troy ounce.

Asian overnight: A mixed affair overnight saw marginal gains in China and Hong Kong counteracted by weakness in Japan and Australia. Continued fighting in Libya sent crude higher once again, with Tripoli airport coming under attack. 

UK, US and Europe: Meanwhile the pound rose slightly, as markets look ahead to a series of key Brexit meetings. Today sees Theresa May meeting both Merkel and Macron ahead of tomorrow's key EU27 summit where they will consider the UK request for an extension to article 50 until the end of June. 

South Africa: In another calendar light of scheduled economic data, global equity markets trade mixed, with moves marginal today. In turn we are expecting a flat open on our local bourse this morning. Oil prices trade at yearly highs despite news of a sharp increase in the number of US oil rigs. Escalating tensions in Libya, a major OPEC oil producer is providing some of the cause for the recent rise in oil. Metal prices trade flat to marginally lower today. The rand remains firm, albeit slightly off its best levels of the last few weeks. Tencent is up 0.4% in Asia, suggestive of a positive start for major holding company Naspers. The BHP Group is up 0.3% in Australia, suggestive of a positive start for local resource counters.

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


Source: Daily FX Economic Calendar

U.S. banks begin to report Q1 earnings today, starting with Wells Fargo and JP Morgan.

8pm - Israeli election results are expected to start coming in

Corporate News, Upgrades and Downgrades

  • Sports Direct has increased its equity issuance offer for Debenhams to £200 million, while it continues to consider a formal takeover for the company at 5p per share. 
  • Anglo American said that the value of rough diamond sales at its De Beers unit had risen to $575 million in the third cycle of 2019, from $469 million. 
  • Australian casino giant Crown Resorts is considering a takeover bid for US gambling company Wynn as the company wrote in a statement "Crown confirms that it is in confidential discussions with Wynn regarding a potential change of control transaction following approaches to Crown by Wynn". The takeover is estimated to cost Crown $7.1bn.
  • Train model maker Hornby has seen revenue fall for the year against last year due to "shortage of stock" the company said in it's trading update. Although, the company added that underlying margins have improved and overhead costs have reduced.

Cancom upgraded to buy at Berenberg
ProSieben upgraded to outperform at Macquarie
Randstad upgraded to overweight at Morgan Stanley

Go-Ahead downgraded to hold at HSBC
Hays cut to equal-weight at Morgan Stanley
Pennon downgraded to neutral at JPMorgan
Severn Trent downgraded to neutral at JPMorga

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Guest Bajlandyna


Hello. I really enjoy your market updates. I’d like to comment on US equities section. What impact on Dow has a downgrade in General Electric ? As far as I’m concerned the company is no longer a part of the index. Or maybe i got something wrong ??Thanks 

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