Jump to content

China trade war escalates - EMEA brief 23 Aug


NadelinaIG

992 views

  • China trade war escalates as new tariffs kick in: U.S. economy set to slow from here on, damaged by trade war
  • EM ASIA FX soften as dollar recovers after falling for six straight sessions
  • Wall Street sets record for longest bull run in history; Key S&P 500 index passes landmark as it goes 3,453 days without major correction
  • Brexit contingency plan papers released; Brexit could be good news for Britain's farmers
  • Australian dollar drops as three government ministers quit
  • Crude oil sees it's largest gains in two months on varying signs of ebbing supply

Asian overnight:  Another indecisive session overnight has seen weakness in Hong Kong and Australian stocks counteract the already unimpressive gains seen in Japan and China. The Australian dollar came under pressure after three main cabinet members resigned to switch allegiance to Peter Dutton, who aims to become the next Liberal leader and ultimately the next Prime Minister. The dollar also strengthened overnight following an optimistic outlook from the Fed, with yesterday’s minutes pointing towards a rate hike at the next meeting despite concerns over trade tensions. Trade talks in China continue into their second day today, yet with neither side likely to cede much ground, it seems likely we will see a positive resolution. 

UK, US and Europe:  A very busy economic calendar sees the day kick off with a host of eurozone PMI readings from the likes of the French, German, and eurozone services and manufacturing sectors. This does carry into the afternoon, with the US manufacturing and services PMI surveys due for release. Also keep an eye out for the eurozone minutes, alongside consumer confidence data, which will both bring expectations of heightened volatility for the euro.

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

Capture.PNG

Source: Daily FX Economic Calendar

8am – 9am – French, German, eurozone mfg & services PMI (August, flash): German mfg PMI to fall to 55.5 from 56.9, while eurozone mfg PMI to fall to 54.6 from 55.1. Markets to watch: eurozone indices, EUR crosses

12.30pm – ECB meeting minutes: these could provide some support to a flagging euro if they reinforce the image of a bank moving towards tightening policy in the longer term. Markets to watch: eurozone indices, EUR crosses

1.30pm – US initial jobless claims (w/e 18 August): claims expected to rise to 217K from 212K. Markets to watch: US indices, USD crosses

2.45pm – US mfg & services PMI (August, flash): mfg PMI to fall to 55.2 from 55.3, while services PMI to fall to 54 from 56. Markets to watch: US indices, USD crosses

3pm – US new home sales (July): forecast to rise 0.6% MoM from -5.3%. Markets to watch: US indices, USD crosses

3pm – eurozone consumer confidence (August, flash): forecast to fall to -0.7 from -0.6. Markets to watch: eurozone indices, EUR crosses
 

Corporate News, Upgrades and Downgrades

  • CRH said that first-half profits rose 4.6% to €497 million, while sales were 1% higher at €11.9 billion. Performance was affected by weather disruption in Europe and North America, and currency headwinds. The dividend was raised by 2.1% to 19.6 cents per share. 
  • Premier Oil reported pre-tax profit of $98.4 million for the first half, up from $40.7 a year earlier, while cash flow fell to $276.6 million from $282.7 million. Net debt was cut to $2.65 billion from $2.72 billion a year earlier. 
  • OneSavings Bank has upgraded tis growth forecast thanks to a good start to 2018. Pre-tax profit in the first half rose 17% to £91.8 million, with the loan book up 11% to £8.1 billion. Growth is now expected to be in the ‘high teens’, from a previous ‘mid-teens’ forecast.  

BNP Paribas upgraded to buy at Bankhaus Lampe
Masmovil upgraded to overweight at Barclays
Sunrise upgraded to overweight at Barclays
Zooplus upgraded to hold at Kepler Cheuvreux

Deutsche Euroshop cut to hold at Berenberg
Terveystalo cut to underweight at Morgan Stanley

 

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
  • Thanks 1

2 Comments


Recommended Comments

It’s the Summer Bank Holiday in the UK on the 27th August, so I just wanted to lay out the changes to our trading schedule as below (all times in UK time).

Monday 27th August

  • UK equities, index futures, soft commodities and interest rates will be closed.
  • We will be making an out-of-hours price on the FTSE 100 until futures re-open at 01.00 on Tuesday.
  • Brent Crude and London Gas Oil will be open as normal.
  • New York Cocoa, Coffee and Sugar contracts have a late open at 12.30.
Link to comment

Doesn’t answer the question tho on what’s going to happen to the wider business landscape tho in the first half of the interview. 

 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      1,935
  • Latest Forum Topics

  • Our picks

    • Swiss Franc Firming Against US Dollar and Euro. Will Momentum Take CHF Higher?
      EUR/CHF made a 7.5-year low at the end of last month at 0.9699, moving below the previous low of 0.9804.

      Since breaking lower, the price has not managed to reclaim 0.9804 and it may continue to offer resistance. The 21-day Simple Moving Averages (SMA)is currently at that level, potentially adding resistance.

      Further up, the recent peak of 0.9957 might offer resistance ahead of the break point at 0.9973.

      In the last session, the price has crossed below the 10-day SMA and remains below the 21-, 55-, 100- and 200-day SMAs.

      A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

      Looking at EUR/CHF, the criteria for a bearish TMA has been met and may indicate that bearish momentum could evolve further.

      Support might be at the recent low of 0.9699 or further down at the 161.8% Fibonacci Extension of 0.9638.

       

      Chart created in TradingView 

      USD/CHF TECHNICAL ANALYSIS

      USD/CHF has bounced off low made at the start of this month at 0.9470 to trade in a wide range of 0.9545 – 0.9650. These levels might provide support and resistance respectively.

      While the price is below all short-, medium- and long-term Simple Moving Averages (SMA), they have positive and negative gradients. This may suggest a lack of conviction for directional momentum that might see further range trading.

      Re-iterating this possibility is the price criss-crossing the 10-day SMA. Recent history has shown that when the price crosses the 10-day SMA, momentum in that direction continues. That is not the case over the last week.

      The recent low of 0.9470 may provide support ahead of the break point at 0.9460. On the topside, resistance might be at the break point of 0.9710 or the July peak of 0.9886.

       Chart created in TradingView

      Daniel McCarthy, Strategist Daily FX

      Source: Daily FX
      • 0 replies
    • Post in FTSE 📈 to drop soon
      Check out phillo's analysis on the FTSE100. Are you tracking any technical analysis for the FTSE you want to share? If so join the forum.
        • Like
    • Rolls-Royce share price: half-year results
      Rolls-Royce shares (LON: RR) sunk by 10% to 83p on Friday after half-year results spooked investors over long-running problems with supply chain issues and inflation.
      • 0 replies
×
×
  • Create New...