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Markets bounce on US - China trade talks - EMEA brief 17 Aug



  • Asian shares gain on US - China trade talks, whilst USD dips.
  • Rating agency Fitch warned that the chance of a Brexit no deal is a ‘growing possibility’, and uncertainty is so great that it’s impossible to accurately predict a likely outcome.
  • Reports that Amazon is looking to launch its own comparison site sent ripples through the UK listed rivals moneysupermarket, gocompare, and confused.com owner Admiral.
  • Aftershocks of World Cup fever and the good weather are seen in rising UK retail sales (up 0.7% in July), a boost to home and garden DIY sales for B&Q, and better profit projections for Carlsberg.
  • Oil prices slip amid fears over global economic growth. US Baker Hughes to keep an eye on later today. 

Markets bounce on US - China trade talks - EMEA brief 17 Aug - Market News - IG .pngAsian overnight: Asian markets gained ground thanks to subsiding trade war concerns, while worries about the Turkish situation also eased for the time being. It looks like the US and China are preparing to talk, and this should help equities to trade in a more optimistic fashion. US markets staged an impressive rebound yesterday, but once again Europe was left trailing behind, repeating the dominant theme of the year so far. The rebound has been catalyzed by optimism over the revisiting of trade talks between China and the US at the end of the month. The trade war rhetoric does still remain a relevant theme in the market place and is still expected to cause further market volatility going forward, as is the economic crisis in Turkey and its possible contagion effects.

UK, US and Europe: Eurozone CPI dominates the first part of the day, while Canadian CPI and then Michigan confidence data are expected later today. With little corporate data on the calendar, investors will watch Tesla stock this afternoon after the New York Times published an interview with CEO Elon Musk.

South Africa: We are expecting a continued but only partial rebound on the JSE this morning as US index futures and most Asian markets trade firmer today. Tencent has rebounded firmly this morning in Asia, adding 3.38% on the day, suggestive of a positive start for major holding company, Naspers, which carries a 23% weighting in the Top40 index. BHP Billiton is 0.3% lower in Australia suggestive of a flat to marginally lower start for local diversified resource counters. 

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

2018-08-17 07_59_38-Forex Economic Calendar.pngSource: Daily FX Economic Calendar

10am – eurozone CPI (July):prices to grow 0.1% MoM and 2.1% YoY, and core CPI to be 1% MoM from 0.9%. Market to watch: EUR crosses

1.30pm – Canadian CPI (July): expected to be 0.1% MoM and 2.4% YoY, from 0.1% and 2.5% respectively. Market to watch: CAD crosses

3pm – US Michigan confidence index (August): sentiment forecast to fall to 96 from 97.9. Markets to watch: US indices, USD crosses

Corporate News, Upgrades and Downgrades

  • RBS has appointed Kate Murray as interim CFO, to start at the beginning of October, while a search for a permanent replacement for Ewen Stevenson continues. 
  • Global Ports said that it expects full-year figures to be in line with forecasts, after pre-tax losses narrowed to $2.1 million from $6.5 million for the first half. 
  • Victoria Oil & Gas said that second quarter gas sales fell, to 183 million standard cubic feet per day, from 189 million in the first quarter. 

Esure upgraded to equal-weight at Barclays
Glencore upgraded to hold at Liberum
Henkel upgraded to outperform at MainFirst
RBS upgraded to buy at HSBC

BowLeven downgraded to neutral at Arden Partners
DNO downgraded to hold at DNB Markets
KSB downgraded to hold at LBBW
dormakaba downgraded to hold at HSBC


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